Question

What is a custodial exchange?

Answer 1

A custodial exchange is a type of cryptocurrency exchange that holds and manages the funds of its users on their behalf. This means that users deposit their funds into wallets controlled by the exchange, giving the exchange custody and control over those assets. This setup is often used to provide an extra layer of security and convenience for users who prefer to have the exchange handle the safekeeping of their funds.

Answer 2

A custodial exchange is a type of cryptocurrency exchange where the platform takes custody of users' funds by holding onto their private keys. This means that users do not have direct control over their funds, as they are stored and managed by the exchange. This setup provides convenience and security for users who prefer to have their assets managed by a trusted third party.