Key takeaways
- When a platform controls the private keys, you depend on its custody arrangements to access and transfer the crypto shown in your account.
- Self-custody gives the user control of keys but also transfers key-management and recovery responsibility to the user.
- Australian regulatory protections depend on the product and service; crypto should not be assumed to have the same protections as a bank deposit or regulated investment product.
- Research custody, withdrawal controls, incident processes and the legal entity behind the service—not just trading fees.
What exchange custody means
Moneysmart explains that a software wallet can be held by you or by a crypto trading platform on your behalf. In a custodial arrangement, the platform controls the infrastructure and private keys used to move assets, while your account records your entitlement or balance under the provider's terms.
That convenience creates dependency on the platform's operational, security and legal arrangements. Read the custody and user terms to understand who holds assets, whether client assets are segregated, and what happens if withdrawals are suspended or the provider fails.
Custody vs self-custody
With self-custody, you control the private keys or recovery credentials. That reduces reliance on an exchange for ongoing access, but mistakes can be unforgiving: losing a recovery phrase, sending to an incompatible network or exposing keys can lead to permanent loss.
Visual explainer
Who controls the keys?
Exchange custody
- Platform controls key infrastructure
- Convenient account recovery may be available
- You rely on provider controls and terms
Self-custody
- You control keys/recovery phrase
- You choose wallet and transfer process
- You carry the recovery and security burden
What Australian regulation does—and does not—tell you
ASIC says consumer protections depend on whether the digital asset or related service falls within the financial-services laws it administers. Do not treat registration, licensing of another service, or an Australian presence as proof that every crypto asset held on a platform has a particular protection.
ASIC's custody guidance for digital assets that are financial products discusses practices such as protecting private keys, segregation and robust controls. Those standards should not be assumed to apply identically to every crypto service; check the actual product and legal arrangement.
Custody questions worth asking
A useful custody review is factual and specific.
- Who is the contracting legal entity?
- Who controls the private keys?
- Does the provider describe client-asset segregation or omnibus arrangements?
- What withdrawal controls and authentication options are documented?
- Does the provider name third-party custodians or sub-custodians?
- What do the terms say about insolvency, suspension or asset recovery?
- Can you withdraw the asset on-chain, and which networks are supported?
Use this guide with live TradingGuide Australia research
Sources
Sources were reviewed on 29 September 2026. Provider pricing and product terms can change; verify current terms with the provider before acting.