What is Custodial?
Who holds the keys: custodial means a company (like an exchange) controls your crypto; non-custodial means you do.
"Custodial" answers one question: who holds the private keys? On a custodial platform — every ordinary exchange account — the company controls the keys and you hold a claim against the company, exactly like a bank balance. In a non-custodial wallet, you hold the keys and no company stands between you and the blockchain.
Neither is simply better. Custody means recoverable passwords, familiar support, and — on regulated Australian platforms — some accountability; it also means counterparty risk, the lesson written in FTX-sized letters and in our exchange graveyard. Self-custody means no one can freeze or lose your coins but you, and also that no one can help when you're the one who errs. The honest answer for most people is both: an exchange for trading, self-custody for the long-term stack.
See it in practice
Related terms: Private key · Cold wallet · KYC · full glossary
FAQ
Are Australian exchanges required to keep my coins safe?
AUSTRAC registration covers anti-money-laundering obligations, not custody standards — historically there was no deposit guarantee for crypto. Australia's new licensing regime is tightening platform obligations, but crypto still carries no government-backed protection like bank deposits do.
What does "not your keys, not your coins" mean?
That custodial balances are promises, and promises depend on the promisor's solvency and honesty. It's a true warning with a missing second half: your keys, your responsibility — including every mistake.
General information only, not financial advice. Definitions are maintained in our fact database and reviewed with the daily rebuild.