Custodial vs. self-custody wallets

The main distinction is who controls the cryptographic keys used to authorize transactions.

Custodial wallets

A company or service controls the underlying keys on the customer's behalf. The service may provide account recovery and other support, but access depends on its systems and policies.

Self-custody wallets

The user controls the keys. This can provide direct control over on-chain assets, but it also means the user is responsible for protecting the recovery material.

The key security principle

Whether a wallet is custodial or self-custody, legitimate support should not need your secret recovery phrase or private key. Treat requests for those credentials as a major warning sign.