Cryptocurrency Q&A
What is the difference between a third-party custodian and a crypto exchange?
What is the difference between a third-party custodian and a crypto exchange?
mia_anderson_painter
Wed Jul 17 2024
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7 answers
1722
Could you elaborate on the key differences between a third-party custodian and a crypto exchange? I'm particularly interested in understanding the roles they play in safeguarding digital assets, the level of security they provide, and how users interact with these platforms. Does a custodian specialize in storage while an exchange focuses on trading? Or are there overlapping functions? Furthermore, how do the regulatory frameworks surrounding these entities differ, and what implications do they have for users' asset security? Clarifying these distinctions would greatly aid my understanding of the cryptocurrency landscape.
7 answers
Tommaso
Fri Jul 19 2024
Cryptocurrency ownership grants individuals the ultimate authority in securing and administering their digital assets.
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BonsaiGrace
Fri Jul 19 2024
This autonomy is in stark contrast to relying on third-party custodians, particularly crypto exchanges.
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Tommaso
Fri Jul 19 2024
When entrusting crypto exchanges with the custody of assets, private keys are inevitably under their control.
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Giulia
Thu Jul 18 2024
This arrangement exposes cryptocurrencies to a range of regulatory constraints, as the exchanges are often subject to strict oversight.
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emma_anderson_scientist
Thu Jul 18 2024
Additionally, entrusting private keys to third-party custodians introduces potential security risks.
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