All terms
Who actually controls the keys to an asset.
Custodial means someone else holds your keys, usually an exchange. Non custodial or self custody means you hold them.
The distinction decides what happens when the platform fails, freezes withdrawals, or is compelled by a court. If you do not hold the keys, you hold a claim rather than the asset.
Funds on an exchange are an IOU. Funds in your own wallet are yours in a way an IOU never is.
That holding coins on a well known exchange is the same as owning them. It is a claim on a company, not control of an asset. It is a reasonable choice with tradeoffs, and it is not the same thing, as several bankruptcies have demonstrated to their customers.
Common questions
How do I know who has custody of my coins?
Is custodial always worse?
Where this comes up on the site
The guides that actually use this word, rather than a list of everything we have written.
Where to go next
More security terms
Want this explained out loud?
Some of these land faster in conversation than in writing. Sessions are one to one and you can ask anything, including the things that feel too obvious to ask.