Crypto custody

Whoever controls the private keys controls the coins, so custody in crypto means protecting keys rather than holding certificates. Custodians combine cold storage, hardware security modules, multi-party computation or multisig schemes, withdrawal approval policies and insurance, and they keep client assets segregated from their own balance sheet.

Institutional investors usually need a regulated custodian. In the United States, investment advisers must use a qualified custodian, such as a trust company or bank, and most spot bitcoin ETFs keep their coins with Coinbase's custody arm. In the EU, MiCA requires licensed providers that hold client assets to segregate them and return them promptly. Banks have entered the market as rules have clarified, including after the SEC withdrew its SAB 121 accounting guidance in January 2025.

Custody adds counterparty risk: a hack, an insolvency or a frozen account can block access. Retail users who choose self-custody avoid that risk but take full responsibility for their keys.