Custody Models

Custody is the foundation of every centralized exchange: who holds the private keys, how assets move between storage tiers, and whether your deposit is segregated or pooled with other customers' funds. Most retail users never see this layer — but it determines whether you can withdraw when you want to.

Hot wallets stay connected for fast withdrawals and deposit detection. They hold a fraction of total assets — enough for daily flow — and are the highest-value target for hackers. Cold storage uses air-gapped or hardware-security-module signing with multi-person approval, trading speed for theft resistance.

Institutional custodians like Coinbase Custody and BitGo offer segregated vaults, insurance policies, and SLAs that retail omnibus models lack. Whether your exchange publishes wallet addresses, rotates keys, or uses transparent reserve attestations is a signal worth checking before leaving large balances on-platform — especially during market stress when withdrawal queues appear first on under-reserved venues.