Custodian

A custodian is a company (or in some cases, a person) responsible for holding and safeguarding assets on behalf of clients. In crypto, a custodian is typically responsible for protecting private keys, managing wallet infrastructure, and controlling access to crypto assets held for users or institutions. Custodians may use cold storage, multisig wallets, operational controls, insurance arrangements, and internal approval processes to secure assets. A crypto custodian is not the same as a regular wallet app because it provides custody as a service rather than only giving users software and tools to manage their own keys.

A crypto trading platform may use a qualified custodian to hold client crypto assets in secure wallet infrastructure instead of keeping all assets within the platform’s controlled hot wallets.