Custody

Custody encompasses the legal authorization given to a financial institution to safeguard and protect financial assets on behalf of its customers, with the primary goal of preventing theft or loss. Custodians have the capability to hold assets in electronic or physical forms. Given their role in safeguarding potentially billions of dollars’ worth of assets for a large number of clients, custodial firms are typically well-established and reputable institutions. In the realm of cryptocurrency and blockchain, custody also entails the management and secure storage of a customer’s private keys. Cryptocurrency exchanges often serve as custodians, responsible for safeguarding their customers’ private keys and cryptocurrency holdings.