Glossary · compliance and risk
What is custody?
Custody is the arrangement for holding a digital asset on someone else’s behalf. Whoever controls the private key controls the asset, so custody is really the question of who holds the key and what obligations come with holding it.
Custodial, non-custodial, and the honest trade between them
In a custodial arrangement a regulated firm holds the keys. You get conversion, fiat settlement, screening, a single reconcilable balance and somebody to call. You also accept that a company is holding your money, which is exactly why the authorisation matters.
In a non-custodial arrangement you hold the keys. Nobody can freeze your funds and nobody can lose them but you. You also do your own conversion, your own off-ramping and your own compliance, and a lost key is final.
Neither is the right answer in general. The right answer depends on how much you hold, how quickly you need to spend it, and whether self-custody is a requirement or a preference.
CoinGate is custodial and authorised for it. If self-custody matters to you as a principle rather than as a convenience, a non-custodial gateway suits you better and we would rather say so than discover it during integration.
What to establish about any custodian
Three questions, and the first one settles most of it.
Under what authorisation
Custody is a regulated activity in the EU under MiCA. Ask for the licence and check the entity holding your balance is the one named on it.
Frequently asked questions
Is CoinGate custodial?
Yes, and authorised for it under CASP authorisation LB002323. Funds sit with us between payment and settlement, which is what makes conversion and fiat payout possible.
Can I use CoinGate and self-custody?
You can withdraw to your own wallet whenever you like, so funds only sit with us as long as you leave them. What you cannot do is have us convert and settle without holding anything.
What is the difference between custody and a wallet?
A wallet is software for holding keys. Custody is an arrangement, usually with obligations and a licence attached. A wallet you control is self-custody rather than custody.
Is custody the same as treasury management?
No. Custody is where assets are held. Treasury management is the decision about what to hold in the first place.