# Exchange custody vs self-custody

Exchange custody vs self-custody — Who holds the keys — and who bears the risk. Verdict: Use FCA-registered exchanges to buy, but consider moving long-term holdings to a wallet you control.

## Leave on exchange

Pros: Simple; Easy to sell quickly; No seed phrase to manage.
Cons: No FSCS if exchange fails; Withdrawal freezes possible; Not your keys.

## Self-custody wallet

Pros: You control access; Works if exchange closes; Can use hardware security.
Cons: Full responsibility for backups; Irrecoverable if phrase lost.

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— Digital Assets UK (https://digital-assets.co.uk/compare/exchange-custody-vs-self-custody/), reviewed 2026-07-17.