Custody is who actually holds your money and your contracts, the platform on your behalf or you yourself, and it decides who controls the funds and what happens to them if something goes wrong.
Last reviewed 21 September 2025 · Educational, not advice
Custody answers a simple but important question. When your money sits in a trading account, who is actually holding it? There are two broad models. In a custodial model the platform takes your deposit and holds the balance for you until you place a trade or ask to withdraw. In a self custody model you keep the funds yourself, usually in a wallet whose keys only you control, and you move them into a market when you choose. The difference shapes how much control you have and how much responsibility sits with you rather than with the venue.
On many regulated venues the platform holds customer money, and the rules that apply often require that customer funds be kept separate from the company's own operating money. The idea behind segregation is that your balance is not the firm's to spend, and that it can be identified as yours if the firm runs into trouble. As of September 2025 the exact protections depend on the platform, the regulator, and where you live, and they can change, so treat any general statement as a prompt to read the actual terms of the venue you are using rather than as a guarantee.
Self custody flips the arrangement. When you hold the keys to a wallet, no platform can move or freeze your funds, and you do not depend on the venue staying solvent to keep what is yours. The cost of that control is that you carry the full burden of safekeeping. If you lose the keys, get tricked into approving a bad transaction, or send funds to the wrong address, there is usually no support desk that can undo it. Self custody removes one kind of risk, the platform holding your money, and adds another, your own mistakes being final.
Custody matters most at the moments people tend not to plan for. If a platform freezes withdrawals, suffers a hack, or fails, the way your funds were held decides what you can recover and how quickly. A balance on a trading venue is generally not the same as an insured bank deposit, and it may not be covered by deposit insurance if the platform itself collapses. Before you fund an account it is worth knowing who holds the money, whether it is kept apart from company funds, and what the stated process is for getting it back. That is part of weighing counterparty and exchange risk honestly.
You deposit 200 dollars and it shows as your balance on the platform. While it sits there, the platform has custody of it, and you are relying on the venue to keep it safe and let you withdraw. If instead you move funds into a wallet whose keys only you hold, you now have custody, and no platform can touch them. The same 200 dollars, two very different arrangements of control and responsibility.
Illustrative only. Numbers are examples, not a quote or a prediction, and protections vary by platform and region.
Knowing who holds your funds does not make trading safe. Prediction markets can lose you money, and a platform can fail or freeze withdrawals no matter how its custody is arranged. Stake only what you can afford to lose, never to chase a loss, and never on borrowed money. If it stops feeling like a free choice, step back. In the United States you can call or text the helpline on 1-800-GAMBLER or visit ncpgambling.org.
Custody is who actually holds your money and contracts. In a custodial model the platform holds your balance until you withdraw. In a self custody model you hold the funds yourself in a wallet you control, which gives you control and the full responsibility that comes with it.
Not necessarily. A balance on a trading venue is generally not the same as an insured bank deposit, and protections vary by platform and region. Some regulated venues are required to keep customer funds separate from company funds, but you should check the rules that apply to each platform and your location.
Self custody means you hold the private keys to a wallet that holds your funds, so no platform can move them. The tradeoff is that you alone are responsible. If you lose the keys or send funds to the wrong place, there is usually no one who can reverse it.
Because it decides what happens to your money if the platform fails, freezes withdrawals, or is hacked. Knowing who holds the funds, whether they are kept separate from company money, and how you would get them back is part of understanding the risk before you put money in.
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