Custodial vs Non-Custodial Wallet
Also called: self-custody, custodial wallet, non-custodial
In a custodial wallet a company holds the keys and you hold an IOU; in a non-custodial one you hold the keys and the company holds nothing. FTX made the difference concrete: customers who believed their exchange balance was theirs became unsecured creditors overnight. Custody buys password resets and support at the price of counterparty risk that self-custody eliminates entirely.