Custodian
A custodian is a person or organization responsible for safeguarding assets or the keys and systems used to control them.
✦ Key Insight
Using a custodian means relying on another organization for key security, withdrawals, operational controls and sometimes asset recovery.
✕ Common Misconceptions
An account balance shown by a custodian is not the same as personally controlling the private keys.
Detailed Explanation
In Practice
Dig Deeper
Private Key
The secret number that authorises spending from a crypto address.
Proof of Reserves
Proof of Reserves is a method used by some custodians to demonstrate that specified customer balances are backed by assets held at a particular point in time.
Custodial
Custodial describes an arrangement in which a third party controls the private keys or operational access to crypto assets on a user's behalf.
Cold Storage
Cold storage keeps cryptocurrency private keys offline to reduce exposure to internet-based attacks.