Custodial wallet

How it is used

Used in product descriptions, risk discussions and regulation. The opposite is a non-custodial (or self-custodial) wallet, where only the user holds the keys. Regulators treat custodial services more strictly because the company is holding other people's assets.

Example sentences

1. Your exchange account works as a custodial wallet, so the exchange holds the keys.

2. We offer a custodial wallet for beginners and a non-custodial option for advanced users.

Common collocations

• custodial wallet provider
• non-custodial wallet
• custodial service
• move funds out of a custodial wallet

Related terms

• self-custodyKeeping your crypto in a wallet where you alone hold the private keys or seed phrase, instead of leaving it with an exchange or another company.
• walletAn app or device that stores the keys you need to access and move your crypto. The coins themselves stay on the blockchain; the wallet only holds the keys that control them.
• centralized exchangeA crypto exchange run by a company that holds customers' funds, matches buy and sell orders on its own system and usually checks users' identities. Often shortened to CEX.
• hot walletA wallet whose keys are kept on a device connected to the internet, such as a phone app or browser extension. It is convenient for daily use but more exposed to hacking.
• private keyA secret number that proves you own a wallet and lets you sign transactions. Anyone who has the private key can move the funds, so it must never be shared.

More terms: Wallets & Keys

• public key
• wallet address
• seed phrase
• cold wallet
• hardware wallet
• multisig