Technology

How Can Crypto Investors Avoid the Regulatory Risks Associated with Centralized Storage.

Cryptocurrency storage is one of the most important things that investors should consider when joining the burgeoning digital asset market. However, most people in this space have little to no knowledge of the existing options. As it stands, crypto exchanges currently hold the larger share of investors’ capital despite the associated risks, including hacking and regulatory pressures from oversight authorities. Before diving deeper, it is worth noting that there are currently two types of crypto wallets; custodial and non-custodial. The former is offered by centralized crypto service providers while the latter requires no third party intervention. Simply put, non-custodial wallets give crypto users access to their private keys, meaning that an investor is fully in control of their funds at any point in time. So, what is the danger of storing crypto funds in a custodial wallet? For starters, this type of crypto storage retains a user’s private keys hence limiting them from accessing their funds without the blessings of the service provider. In the past, there have been several cases where crypto investors lost a ton of money as a result of crypto exchanges being hacked or directives from authorities to freeze funds.

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