Custody
The safekeeping of crypto assets and the private keys that control them, often handled by a regulated third party.
Whoever holds the private keys holds the coins. Custody is the business of holding them safely, through cold storage and multi-signature setups, backed by insurance and audited controls.
Institutions rarely self-custody; they hire qualified custodians who meet specific regulatory standards. The 2022 collapses of FTX and Celsius, where customer funds were mixed with company money, made the distinction between holding assets and controlling them a central concern. Self-custody, by contrast, keeps the keys with the user and cuts out the middleman.
Related terms
Keeping crypto keys completely offline for long-term safekeeping, out of reach of malware and remote attackers.
MultisigA wallet setup that requires several private keys to approve a transaction instead of just one.
Self-CustodyHolding your own private keys directly, so no exchange or company stands between you and your crypto.
Proof of ReservesAn audit method by which an exchange shows it holds enough assets to cover what customers are owed.