Last Updated on June 14, 2025 by Olga Davis
Key Takeways
- Crypto custody solutions securely store digital assets by protecting private keys and ensuring safe access to funds.
- Custody types include self-custody, third-party, and institutional—each offering different trade-offs between control, security, and compliance.
- Leading platforms use technologies like multisig, MPC, and cold storage to reduce risks of fraud and mismanagement.
What Is Crypto Custody?
Crypto custody is the secure storage and management of private keys that grant access to digital assets. Unlike traditional finance where banks hold assets, crypto custody focuses on protecting these keys, as control over them means control over the assets. Selecting the right custody solution is crucial for individuals and institutions to ensure security and reliable access to their cryptocurrencies.
Why Is Crypto Custody Important?
- Loss prevention. Without custody, lost keys = lost funds.
- Protection against hacks. Custodians offer hardened defenses.
- Regulatory compliance. Institutional custody services often align with AML regulations.
- Insurance and auditability. Many third-party custodians provide insurance and third-party attestations.
Types of Crypto Custody Solutions
1. Self-Custody
- What is it? You hold your own private keys.
- Examples: Hardware wallets (Ledger, Trezor), mobile wallets (Trust Wallet, MetaMask).
- Pros: Maximum control, privacy, no third-party risk.
- Cons: High responsibility—lose the key, lose the crypto.
2. Third-Party Crypto Custody
- What is it? A custodian manages your keys for you.
- Examples: CoinRabbit, Anchorage, BitGo.
- Pros: Simpler user experience, recovery options, insurance.
- Cons: Less control; subject to provider’s policies and potential breaches.
3. Institutional Crypto Custody
- What is it? Advanced, compliant, and insured storage systems for businesses and hedge funds.
- Examples: Fidelity Digital Assets, Zand Custody, NYDIG.
- Features:
- Multi-layered security (HSMs, multi-sig, MPC)
- Regulatory licensing
- Full audit trails and reporting
Hot vs. Cold Crypto Custody: What’s the Difference?
| Type | Hot Wallet | Cold Wallet |
|---|---|---|
| Connection | Connected to internet | Fully offline |
| Convenience | Fast and accessible | Secure, but less convenient |
| Use Cases | Active trading, staking | Long-term storage |
| Risk Level | Higher (susceptible to hacking) | Lower (air-gapped from threats) |
Crypto Custody Solutions: Multisig vs. MPC
🧬 Secure Multiparty Computation (MPC)
- The private key never exists in one place – it’s split across multiple nodes, making unauthorized access or key theft extremely difficult.
🔐 Multisignature (Multisig)
- Requires multiple private keys to approve a transaction.
- Example: 2-of-3 or 3-of-5 signers needed to transact.
Top 10 Crypto Custody Solutions (2025 Overview)
| # | Custodian | Type | Key Features / Notes |
|---|---|---|---|
| 1 | CoinRabbit | Cold Storage Custody Solution | Custody solution integrated with crypto-backed loans, holding, saving, and swap services. Designed for secure and simple asset storage, optimized for retail and business use. |
| 2 | Coinbase Custody | Institutional Custodian | SEC-regulated, fully insured, offers segregated accounts, supports institutional trading. |
| 3 | Anchorage Digital | Federally Chartered Bank | The first US crypto bank. End-to-end platform for custody, staking, governance, and compliance. |
| 4 | Fireblocks | MPC-Based Custody Platform | Provides secure infrastructure (not direct custody) for institutions needing transaction security layers. |
| 5 | BitGo | Institutional Custodian | Trusted name in crypto custody with multisig wallets, full insurance, and institutional clients. |
| 6 | Ledger Vault | Enterprise Hardware Custody | Cold storage solution backed by hardware security modules. Used by asset managers and funds. |
| 7 | Copper | Institutional MPC Custody | Known for ClearLoop technology, allowing secure off-exchange settlement with digital asset trading firms. |
| 8 | Zand Digital Custody | Regulated Custody (UAE) | Onshore UAE custody compliant with VARA; strong HSM security model for private clients. |
| 9 | Kraken Custody | Exchange-Based Custody | Combines trading platform with integrated cold storage; user-friendly for exchange clients. |
| 10 | Casa | Advanced Self-Custody Tools | Personal multi-key setup for long-term holders who want full control with guided support. |
What Is CoinRabbit and How Does Its Crypto Custody Work?
CoinRabbit is more than a crypto lending service — it’s an all-in-one crypto app designed to make everyday crypto management simple, secure, and accessible. It offers a suite of practical tools tailored to real user needs:
- Crypto loans – borrow stablecoins instantly without selling your assets by using your crypto as collateral.
- Long-term holding – securely store your crypto with peace of mind.
- Instant swaps – easily exchange major cryptocurrencies without delays.
- Savings accounts – earn passive income on your crypto with flexible interest options.
Key Principles of CoinRabbit Crypto Custody
🔐 Custodial architecture with security-first design
Users do not control private keys directly—CoinRabbit handles key management via enterprise-grade internal protocols, ensuring proper authorization and accountability across the custody lifecycle.
🔐 Cold wallet infrastructure by default
All user collateral is stored in offline (cold) wallets—completely air-gapped from any trading or online infrastructure. These wallets are not connected to the internet, significantly reducing the surface area for remote attacks or exploits.
🔐 Multisignature authorization for fund movement
Access to cold wallets is governed by a multisig scheme that requires coordinated action from multiple internal stakeholders. No single person or system can authorize a transaction independently. This reduces single-point-of-failure risk and improves operational security.
🔐 No collateral rehypothecation
CoinRabbit adheres to a strict no rehypothecation policy: user collateral is never lent out, reused, or reinvested. It remains fully reserved and locked in cold storage until the loan is closed, protecting user value at all times.
