What is a crypto custodian? Who holds your customers' coins
By SendPay Business · · 2 min read
A crypto custodian is a company that holds crypto on behalf of others and looks after the private keys that control it. When someone buys crypto in an app and leaves it there, a custodian is usually the one actually holding it.
Custodial vs self-custody
With a custodial wallet, the app or its custodian holds the keys and the customer logs in to see their balance. With self-custody, the customer holds their own keys, so nobody else can move the coins, but losing the keys means losing the coins.
What a custodian does
- Stores the private keys, often mostly offline in cold storage.
- Keeps records of which customer owns what.
- Processes withdrawals and deposits when customers ask.
What to ask before you launch
Who holds the assets, where the keys are stored, and which registrations apply in your country. In the UK, crypto businesses usually need to be registered with the FCA for anti-money-laundering purposes.
Where SendPay fits
SendPay's Crypto Exchange platform lets your customers buy, sell and hold crypto under your own brand, with assets held with regulated partners. SendPay tells you in writing which licences apply to your platform before you pay.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.