The Importance of Self-Custody

Self-custody of cryptocurrency is critical because it centers around the principle of ownership, summarized by the phrase 'not your keys, not your crypto.' When crypto is stored on an exchange, the exchange retains control over the private keys, leaving users exposed to risks such as hacks and theft. High-profile incidents, such as the Ronin Network hack resulting in a loss of $625 million and the famed Mt. Gox hack where 650,000 Bitcoin was stolen, highlight the potential dangers associated with exchanges. Therefore, moving cryptocurrencies to self-custody wallets is often recommended for long-term holding to enhance security and ownership.