Custodial

A custodial wallet or service is one where someone else—usually a company—holds and manages your private keys for you. Common examples include most cryptocurrency exchanges and online brokerages. In these setups, your balances are displayed based on the provider’s internal records rather than direct control over the actual coins.

While custodial services can offer strong security features and user-friendly interfaces, users have to trust the provider entirely. You cannot independently verify whether your funds are really there or how your assets are protected. Custodial platforms are also subject to regulations; your transactions might be censored, or your account frozen or seized if the company is compelled by authorities. Because of these risks, many in the crypto community recommend moving your assets to a non-custodial (self-custody) wallet where you alone control the private keys.