Definition ∞ Self-custody risk refers to the potential hazards associated with individuals directly managing their own digital asset private keys and seed phrases. These risks include loss of access due to forgotten credentials, theft through phishing or malware, or accidental destruction of recovery information. It places the full responsibility for asset security on the owner.
Context ∞ As digital asset adoption grows, self-custody risk is a frequent topic in crypto news, often highlighted by stories of lost funds or security breaches. While self-custody offers independence from intermediaries, it demands a high level of technical proficiency and security awareness. The industry continuously seeks to develop more user-friendly and secure self-custody solutions to mitigate these inherent dangers.
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