Custodial
An arrangement where a company, such as an exchange, holds the private keys to your coins for you.
Custodial in more detail
When your crypto sits on an exchange or in a custody service, the company controls the private keys. You log in with a username and password, and the company moves coins when you ask.
US securities regulators sum it up: "If the third-party custodian is hacked, shuts down, or goes bankrupt, you may lose access to your crypto assets." The company can also freeze your account or pause withdrawals. Lesson 12 gave examples.
In self-custody, the keys are in a wallet you control and the backup is your seed phrase.
All 128 terms · Checked against the lesson's sources on 8 October 2026.
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