What is a Custodial Wallet?
A custodial wallet is a type of cryptocurrency wallet where a third party holds and manages your private keys for you. In crypto, your private key is the cryptographic secret that proves ownership of your digital assets on a blockchain. When a custodian (like a crypto exchange or wallet provider) stores these keys, they also control access to your funds on your behalf.
With a custodial wallet, you do not have direct control over your private keys. Instead, the service provider handles security, backups, and access, often offering familiar account recovery options like password resets and customer support. Because of this, custodial wallets are usually considered more convenient and beginner-friendly than self-custody alternatives. However, they also require trust in the provider and may introduce risks like platform outages or limits on withdrawals.
Understanding the trade-offs between custodial and non-custodial wallets helps users choose the level of control, responsibility, and convenience that matches their needs. Whether you’re just getting started or scaling your crypto activity, this distinction shapes how securely you interact with your digital assets.
Because custodial providers act as intermediaries, they are generally classified as Virtual Asset Service Providers (VASPs). This requires them to comply with strict legal frameworks, including Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.
By managing your private keys and assets, KAST operates under this custodial framework to provide a secure, regulated environment. This ensures your account is protected by institutional-grade security and identity verification standards, offering a safety net for fund recovery that non-custodial wallets cannot provide.
