Apr 10, 2023
You have likely come across the two different ways to store your crypto: custodial and non-custodial. What’s the difference? The answer lies in who has possession of the private keys that provide access to your assets. With non-custodial wallets, only you have access to the private keys (typically stored in your phone, browser, or hardware wallet). This can be appealing because you maintain absolute control over your assets, but beware: if you lose your keys and misplace the recovery seed phrase, your crypto is lost forever.
So what is a custodian and why go with one?
A custodian is a service provider that manages private keys and seed phrases so you don’t have to. Typically, you just login with a username and password. It does away with the complexity – and associated risks – of managing private keys and safeguarding seed phrases. This also means easy access across all your devices. You still maintain control over your assets, but access is granted by your trusted custodian.
What about a qualified custodian?
Although US regulation is evolving, the SEC defines a qualified custodian as, generally, a federally or state-chartered financial institution, such as a regulated trust company. These are strictly regulated companies that are required to hold customer assets 1-for-1 in segregated accounts, unlike bank deposits and unlike most exchanges. Your qualified custodian can only do exactly what you instruct them to with your assets, and are subject to regular and rigorous audits. This means peace of mind, knowing that your digital assets are safe – no lending, no funny business, no transactions on the blockchain that you did not approve.
Why choose Bridge Trust?
Bridge Trust holds one of a few state-chartered trust company licenses that is approved specifically for digital assets. We make safety and security a nexus point for everything we do. Bridge Vault lets you access your crypto and digital assets using a username and password, reinforced by strong multi-factor authentication. We also match your assets to your identity; meaning that if you lose your password, we can help you regain access to your assets securely. We generate unique addresses and private keys specific to you. Not only are we rigorously regulated, you can publicly verify the integrity of your assets independently, at any time.
There are many different solutions for managing crypto assets and it's important to figure out what fits your needs. If you're looking for a secure and simple way to manage your assets, along with great access to web3, check out Bridge Vault.