Exchange custody vs self-custody
Who holds the keys — and who bears the risk.
Leave on exchange
- + Simple
- + Easy to sell quickly
- + No seed phrase to manage
- − No FSCS if exchange fails
- − Withdrawal freezes possible
- − Not your keys
Self-custody wallet
- + You control access
- + Works if exchange closes
- + Can use hardware security
- − Full responsibility for backups
- − Irrecoverable if phrase lost
Quick answer: Use FCA-registered exchanges to buy, but consider moving long-term holdings to a wallet you control.