Custodial Wallet
A wallet where a third party, like an exchange, holds your crypto and private keys for you.
A custodial wallet is a type of wallet where someone else holds your crypto’s private keys — usually an exchange or platform like Binance or Bybit.
You can log in and trade easily, but you don’t technically own the keys that control your funds.
In crypto terms:
👉 “Not your keys, not your coins.”
Why it matters
- Custodial wallets are beginner-friendly — easy to use, recover, and manage.
- However, you’re trusting the company’s security instead of your own.
- If the platform is hacked or freezes withdrawals, your funds are at risk.
When to use it
- For trading or short-term storage.
- When you need quick access to your crypto.
- Never for large, long-term holdings — use a cold wallet instead.
💡 Lanzo Tip
Custodial wallets are like keeping your crypto in a bank account —
convenient, but you’re not holding the keys to your own money.