Exchange-Level Custody Control

Exchange-level custody control refers to the centralized management of private keys by a platform on behalf of its users. This model provides convenience and recovery options but centralizes risk, as the exchange becomes a high-value target for hackers.

Custody solutions often involve a mix of cold storage, multi-signature requirements, and sophisticated institutional security measures. Users who rely on exchange custody are subject to the platform's internal security protocols and its ability to comply with legal requests, including asset freezes.

This model is the standard for most retail trading, but it highlights the trade-off between self-sovereignty and professional management. Effective custody is the bedrock of institutional confidence in the digital asset market.