Who holds the keys.
WHAT SELF-CUSTODY MEANS
You hold the keys, and bear full responsibility.
WHAT IT PROVIDES
No counterparty risk No permission required No freezing or seizure by a provider
WHAT IT COSTS
Total responsibility for security No recovery if keys are lost No recourse for mistakes
WHAT CUSTODIAL SERVICES PROVIDE
Recovery of access Familiar security practices Insurance, sometimes Regulatory protections, in some jurisdictions
WHAT THEY RISK
Provider failure Provider fraud Freezing of accounts Withdrawal suspension
WHAT HISTORY SHOWS
Major custodians have failed, taking customer assets with them.
WHY THAT KEEPS HAPPENING
Customer assets used for other purposes, and inadequate reserves.
WHAT TO EXAMINE FOR ANY CUSTODIAN
Regulatory standing Whether assets are segregated Whether reserves are verifiable Their track record
WHAT PROOF OF RESERVES CLAIMS
That assets held match obligations.
WHAT IT FREQUENTLY OMITS
Liabilities, without which it proves little.
WHAT MULTI-SIGNATURE ARRANGEMENTS PROVIDE
Requiring several keys to authorise.
WHAT THEY SUIT
Organisations, and high-value holdings.
WHAT TO ESTABLISH
Who holds which key, and what happens if one is unavailable.
