Custody
Who actually holds an asset on your behalf, and what happens to your claim if that holder fails?
In plain words
Custody is the arrangement where a third party holds an asset, such as private keys to a token, so that clients can trade or transfer without handling the asset themselves. The holder may be a regulated custodian, an exchange, or the owner via a self-custodied wallet.
Why it matters
Holding with a custodian means your claim on the asset depends on that custodian's solvency and security. If the custodian fails or is breached, recovering the asset can take months or never happen, regardless of the asset's market price. In self-custody the loss risk shifts to the owner.
In a real week: ETH, week of 1 June 2026
In the week of 1 June 2026, ETH fell 15.77%, from an open of 2007.02 to a close of 1690.51, inside a range of 34.26% between a high of 2021.50 and a low of 1505.68. Dollar volume reached 7.72bn, 1.65 times its prior 12-week average, with a worst day of -10.58% on 5 June and a best day of 7.7% on 7 June. Selling into that week required the holding venue to be functioning.
A common mistake
Treating assets shown in an account as assets you own outright. The account balance is a claim on the custodian, which is only as good as that custodian's ability to honour it.