Last Updated: December 27, 2021

Custody of your Cryptocurrency

Custody of your Cryptocurrency:

Custody of your crypto refers to the responsibility of keeping your crypto. This is different from ownership. You may own crypto but the custody may not be yours. There are two types of custody; non-custodial and custodial. With non-custodial, you are in charge of looking after your crypto. Custodial custody means you trust a service to look after your crypto. When choosing which option is right for you, it is also important to keep in mind how much crypto you own as this may change your decision process. The following describes some, but not all, the threats linked to the custody of your crypto.

Threats of Custodial Custody:

Being aware of the threats each custody method has is the first step in making your decision of which to use. Brute force attack is a threat custodial custody faces. This is password-breaking using software that tries countless passwords based on a person’s information. Brute force attacks are a threat to custodial custody because it is used to break into your custodial account leaving your crypto for them to take. The best way around this is to create a 2FA authentication on these accounts.

Going along the lined of brute force attacks is SMS hijacking. This is where a hacker will access your text messages. These can be your 2FA authentication messages or any password-sensitive information. To remedy this threat, you can use an app like Google authenticator. This will give you a set key of numbers that changes every 30 seconds to authenticate your login instead of getting SMS messages.

Threats of Non-Custodial Custody:

Having large amounts of crypto with no custodial custody can leave you at risk for an in-person attack. This is where someone is kidnapped or attacked for access to their crypto. To minimize this risk, don’t be publicizing how much crypto you have or how much it is worth.

Threats of Custodial and Non-Custodial Custody:

Phishing can be a threat to both custodial and non-custodial custody. Phishing means tricking people into downloading software that compromises your computer, taking your information or details, or accessing your accounts. Phishing is something many people are aware of without the added risk of crypto and should be taken seriously. The easiest way to mitigate this threat is to not open or click on anything you do not 100% recognize.