Definition
Self-Custody (Crypto)
Self-custody means holding your own crypto private keys rather than leaving assets on an exchange, giving full control but full responsibility for security. This is informational.
Self-custody means you control the private keys to your crypto, typically via a non-custodial wallet, instead of trusting an exchange to hold them. The principle 'not your keys, not your coins' captures the idea that exchange-held assets carry counterparty risk.
Self-custody removes reliance on a platform that could be hacked, freeze withdrawals or fail, but it shifts all responsibility to you: lose your keys or recovery phrase and the assets are gone permanently, with no helpdesk to recover them.
In India, self-custodied assets remain VDAs under the 30% tax and 1% TDS rules. This entry is informational only, not investment advice; crypto is high-risk and self-custody demands careful security.
Related terms
- Crypto Wallet (Hot vs Cold)A crypto wallet stores the private keys that control your crypto assets; a hot wallet is internet-connected for convenience, while a cold wallet stays offline for security. This is informational.
- Crypto ExchangeA crypto exchange is a platform where users buy, sell and trade cryptocurrencies; Indian exchanges register as reporting entities and deduct 1% TDS. This is informational, not advice.
- DeFiDecentralised Finance refers to financial services — lending, trading, yield — run by smart contracts on blockchains without traditional intermediaries. This is high-risk and informational, not advice.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.