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Qualified custodian
A qualified custodian is a firm that US rules allow an SEC-registered investment adviser to use to hold client assets, such as a bank or a broker-dealer. Under the SEC's custody rule, an adviser that holds, or can obtain, client funds or securities must keep them with one.
What it means for you. In the US, if a registered adviser manages assets for you, this rule decides where they can be held and whether an independent accountant checks they exist. On 1 October 2026 the SEC proposed changes to these custody rules aimed at crypto assets, including state trust companies as custodians; these are proposals, not final rules.
Sources: SEC investor alert: Exercise Caution with Crypto Asset Securities, SEC: Commissioner statement on proposed amendments to custody rules (1 October 2026) · checked 4 October 2026
Custody
Custody is who holds the private keys that control your crypto. With self-custody you hold the keys and are solely responsible for them; with third-party custody an exchange or a dedicated custody provider controls the keys for you.
What it means for you. In the US, the SEC's investor office notes that if a third-party custodian is hacked, shuts down or goes bankrupt, you may lose access, and that some custodians lend deposited assets ('rehypothecation') or pool customers' assets together. With self-custody, a lost, stolen or damaged key or seed phrase can mean permanent loss.
Source: SEC investor bulletin: Crypto Asset Custody Basics for Retail Investors · checked 4 October 2026