Discover why the recent FTX debacle has caused uproar in the crypto world and how self-custody provides users with a secure option to manage their crypto.
The recent FTX debacle has caused an uproar in the crypto world, leaving users feeling frustrated and vulnerable. But rather than relying on centralized custodians managing their funds, more and more crypto users are opting for self-custody.
Understanding Self-Custody in Crypto – Why It’s So Important
Self-custody is one of the most important aspects of cryptocurrency ownership, and understanding this concept is critical to mastering digital asset security.
With the collapse of FTX, investors were unable to access their funds. This highlights the importance of self-custody and the need for users to keep direct control of their private keys, putting them in sole possession of their funds.
What is Self-Custody in Crypto?
Self-custody is storing your cryptocurrencies in a wallet that you have sole control over, meaning that the user has full authority and responsibility over the security of their crypto holdings, as a third-party or trusted institution does not hold them.
“Not your keys, not your crypto” is a well-known saying in the crypto industry because if you don’t hold your private key, someone else – like a centralized exchange has control of your funds.
Proper key management is essential when securing your cryptocurrencies. Private keys grant access and permission to funds stored in cryptocurrency wallets, so you must keep them secure and store them in a safe place. Never share your private keys with anyone, as this could put your funds at risk. Instead, back up your private keys offline.
Self-custody offers a more secure alternative for users to store their cryptocurrencies without relying on a third party. It eliminates the risk that custodial exchanges have control over the funds. In addition, self-custody allows users to keep their cryptocurrencies safe from malicious actors, reducing the risk of another FTX-like debacle occurring in the future.
Finding a Trustworthy crypto brokerage that supports Self-Custody
When looking for a cryptocurrency brokerage, self-custody is essential to ensure the safety and privacy of your crypto holdings.
Researching and ensuring that you are dealing with a reputable and secure cryptocurrency brokerage is essential. Look for reviews online from trusted sources, read through forums, ask around in crypto communities, and talk to people who have used the service themselves. Ask about their experience with the platform’s security, customer service, fees, ease of use, and coins offered.
Institutional Grade Crypto Infrastructure
Building an institutional-grade crypto infrastructure that will pass regulatory approval is technically challenging, time-consuming, and expensive. NEXUS, our API-driven crypto ISO/IEC 27001 & ISAE 3402 Type 2 certified crypto infrastructure solution has the highest levels of security, confidentiality, and availability.