What are the risks of relying on third-party custodians instead of self-custody for cryptocurrencies?

3 answers

• May 11, 2022 · 3 years ago
  One of the risks of relying on third-party custodians for cryptocurrencies is the potential for security breaches and hacks. While custodians may have robust security measures in place, they can still be vulnerable to cyber attacks, which could result in the loss of funds. It's important to thoroughly research and choose a custodian with a strong track record in security to minimize this risk.
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• May 11, 2022 · 3 years ago
  Another risk is the lack of control over your own assets. When you rely on a third-party custodian, you are essentially trusting them with the custody of your cryptocurrencies. This means that you have to rely on their policies and procedures for accessing and managing your assets. If the custodian experiences any issues or goes out of business, you may face difficulties in accessing your funds.
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• May 11, 2022 · 3 years ago
  At BYDFi, we understand the convenience that third-party custodians can offer, but it's important to be aware of the risks involved. While custodians may provide additional security measures and insurance, there is still a level of trust required. It's crucial to weigh the benefits of convenience against the potential risks and consider diversifying your custodial options to mitigate these risks.
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