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Why Binance provides custodial and non-custodial storage

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How do you store your crypto asset? Custodial or non-custodial? Users on Binance have the option of using either a custodial system or a non-custodial system to store their crypt assets, CZ, CEO of the company explained at an online forum. 

“We acquired Trust Wallet about three years ago,” he said, which gives users access to a non-custodial storage where they are responsible for their private keys.

CZ further explained that Trust wallet is an open source code project that allows users to take responsibility for their asset which means that when they lose their private keys, they can’t retrieve it. On the other hand, he noted that users who don’t want to hold their assets by themselves can use the Binance in-built wallet which is custodial. 

He revealed that decisions about the kind of wallet to use is important because there might be scenarios where users want to secure their assets and hand it over to their kids when they are no more. Depending on what you want and how responsible you can be, Binance offers the two options, he added.

Use common sense

“Use common sense,” the Binance Chief said when advising users on how to deal with exchanges and safety of their assets. He added that users should observe platforms that take specific steps toward transparency as taking the right step is good, not taking any step is bad, while doing it the wrong way is worse.

CZ also highlighted that users shouldn’t expect all platforms to take the same steps in terms of security because of economies of scale. While larger firms can invest billions into security, smaller firms can do as much as they can, he explained. 

On investing, he warned that users shouldn’t use funds that they need for everyday activities rather they should consider their investments in crypto a long term choice. “If you don’t know what is happening, HODL,” he said. There’s no need getting involved in panic sales due to FUD propagated by bad actors in the industry.

Read also;

Why every exchange needs to hold stablecoins

We don’t have loans; we don’t owe anyone – CZ

 

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