# Custodial vs Non-Custodial Wallet

*Crypto & Digital Assets — Finicade finance glossary*

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.

**Also known as:** self-custody, custodial wallet, non-custodial

**Related terms:** [Private Key](https://finicade.com/glossary/private-key), [Crypto Exchange](https://finicade.com/glossary/crypto-exchange), [Cold Storage](https://finicade.com/glossary/cold-storage), [Seed Phrase](https://finicade.com/glossary/seed-phrase), [Counterparty Risk](https://finicade.com/glossary/counterparty-risk)

Source: https://finicade.com/glossary/custodial-vs-non-custodial-wallet