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What is self-custody?
Self-custody means holding the private keys to your crypto yourself, in a wallet you control, instead of leaving them with a company. Nobody else can freeze, move or lend your coins, and nobody else can restore them if the keys are lost.
What it means for you
You carry the whole job of backup: if the seed phrase is lost or stolen, there is no password reset and no one to call. Anyone offering to recover a self-custody wallet for a fee is very likely a scam. Test restoring from your backup before relying on it.
How it works
Self-custody puts every key task on you: generating the keys, usually from a seed phrase; storing the backup; and signing each transaction on a device you control. No one stands between you and the protocol, so no one can freeze or move the coins, and no one can reverse a mistaken payment or restore a lost seed; SEC staff describe it as sole control and sole responsibility. The backup is the whole wallet. Tools that remove the single point of failure include multisig, which needs several independent approvals, and a BIP39 passphrase, which adds a second secret.
Sources: ethereum.org: Ethereum wallets, bitcoin.org: Secure your wallet, SEC Office of Investor Education: Crypto asset custody basics for retail investors, BIP-39: Mnemonic code for generating deterministic keys · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.