9 Best Custodial Wallets for Crypto in 2024
Table of Contents
What are custodial wallets?
Custodial wallets are a type of cryptocurrency wallet where a third party, such as a cryptocurrency exchange, manages the user’s cryptocurrency and private keys. This means that the user does not have full control over their funds and must trust the custodian to secure their assets.
Custodial wallets are generally considered less secure than non-custodial wallets, but they are often more convenient and easier to use, making them a sensible solution for users who prioritize ease of use and backup recovery options.
List of the best 9 custodial wallets for 2024
It can become confusing when choosing a crypto wallet with so many options available. We’ve prepared a list of the 9 best custodial wallets for crypto assets to make your decision easier:
- Coinbase
- Gemini
- BitMex
- BitGo
- Binance
- Bitfinex
- Cobo Wallet
- Freewallet
- Poloniex
Let’s explore each option on our list in more detail:
#1: Coinbase
Coinbase, the largest cryptocurrency exchange in the United States, is a top crypto stock to follow.
Opting for Coinbase wallet means choosing a trusted exchange with a user-friendly interface, diverse cryptocurrencies, advanced tools, and opportunities to earn free crypto.
Its emphasis on regulatory compliance ensures a smooth and secure crypto trading experience with various features.
Why choose the Coinbase custodial crypto wallet?
Coinbase wallet is a favoured choice for a secure and user-friendly cryptocurrency wallet with various features. It is suitable for both beginners and experienced users.
Pros:
- Available in over 130 countries.
- A wide range of digital assets.
- Extensive educational resources.
Cons:
- Relatively high transaction fees.
- Not as secure as hardware wallets.
- Limited control over your private keys.
Key features:
- Ability to store and manage all of your digital assets in multiple wallets
- Use of DeFi liquidity pools
- Support of NFTs
- Token approval alerts
- Transaction previews
Pricing: 0.50% fee for each trade, 3.99% for credit card transactions, and 1.49% for purchases made through Coinbase wallet or bank account.
Security: Biometrics, passwords, security locks, a browser extension compatible with Ledger hardware wallets, dApp blocklist, spam token management, support for multiple addresses, and permission management.
User experience: Coinbase crypto wallet has a user-friendly interface that is easy to navigate.
Supported cryptocurrencies: 240+ cryptocurrencies, including Ethereum, Polygon, Bitcoin, Dogecoin, Litecoin, Stellar Lumens, Ripple, and Solana networks and Ethereum Layer-2 networks: Arbitrum, Avalanche C-Chain, BNB Chain, Fantom Opera, Optimism, Polygon, and Gnosis.
Reputation: Coinbase is one of the most reputable cryptocurrency exchanges in the world. The company has operated since 2012 and has a proven track record in terms of security and reliability.
Licensing and regulation: Coinbase holds MSB or VASP licenses in various countries, including Canada, Italy, Japan, Lithuania, Poland, Spain, Sweden, the UK, and the US.
#2: Gemini
Gemini was founded by early cryptocurrency investors Cameron and Tyler Winklevoss. It acts as both a cryptocurrency exchange and a custodian. The official website states that Gemini is a SOC1 Type 2 and SOC 2 Type 2 certified crypto exchange and custodian.
Why choose the Gemini custodial crypto wallet?
Gemini offers a user-friendly and secure interface, diverse buying and selling options, and the potential to earn interest on stored cryptocurrency.
Pros:
- A vast array of digital assets.
- Seamless fiat onramps.
- Insurance against certain types of Digital Assets losses.
Cons:
- Higher fees for advanced features.
- Poor customer service.
- Various transactional issues.
Key features:
- Insured hot wallets
- Multiple buying and selling options
- Institutional-grade cold storage system
- High-security storage
- Native SegWit addresses
- 24/7 customer support
- Coordinated disclosure program
Pricing: A flat fee applies to trades under $200, while trades over $200 incur a 1.49% charge. Debit or credit card purchases are subject to a 3.49% fee.
Security: 2FA, hardware security keys, address allowlisting, multi-signature digital signature scheme, rigorous background checks,
User experience: While the platform is easy to use, there are user complaints about changes in earn programs, security holds on crypto transfers, and prolonged transfer delays causing financial losses.
Supported cryptocurrencies: 80+ cryptocurrencies, including BTC, ETH, GUSD, XRP, ADA, AAVE, DAI, LINK, LTC, and USDC.
Reputation: The Gemini wallet is a popular choice for its security, insurance, and user-friendly interface, making it a preferred choice for managing digital assets.
Licensing and regulation: Regulated by NYSDFS, MAS, and FCA.
#3: BitMEX
BitMEX is a trading platform that allows investors to access global financial markets using Bitcoin and other cryptocurrencies. It’s developed by finance professionals with over 40 years of experience and is owned by HDR Global Trading Limited.
Why choose the BitMex custodial wallet?
The BitMEX wallet is known for its security and is a trusted platform for storing and trading cryptocurrencies. It offers many advanced features.
Pros:
- A wide range of cryptocurrencies.
- One of the most liquid cryptocurrency wallets in the world.
- A simplified registration process.
- Advanced security features.
Cons:
- Complex trading features.
- High fees for margin and futures trading.
- Limited customer support.
Key features:
- Hot and cold wallets.
- Manual checking of withdrawals.
- Up to 100x leverage across various perpetual swap and futures contracts for cryptocurrencies.
- Extensive market data.
- Global accessibility.
Pricing: -0.015-0.0750% trading fees, no Bitcoin withdrawal or deposit fees, and no Tether deposit fees. A hidden order always pays the taker fee.
Security: Amazon Web Services, multisignature wallet addresses.
User experience: It’s not recommended for beginners and is more suitable for experienced traders familiar with margin trading and technical studies.
Supported cryptocurrencies: Bitcoin, Ether, Litecoin, and other crypto assets. An exact number is not given.
Reputation: The BitMEX wallet is known for its high trade value, liquidity, easy registration, and powerful analytics. Controversies in the past may have affected its reputation. It is not for beginners; it is more suited for experienced traders.
Licensing and regulation: Registered with the CFTC as a DCM and SEF, regulated by FSA in Japan and Seychelles. Fully licensed and owned by HDR Global Trading Limited founders.
#4: BitGo
BitGo, established in 2013, is a leading provider of secure solutions for the digital asset economy. BitGo stands at the forefront of digital asset financial services, delivering liquidity, custody, and security solutions to institutional investors.
BitGo now offers regulated custody, borrowing and lending, and other services, serving over 1,500 institutional clients globally. It processes approximately 20% of all global Bitcoin transactions by value.
Why choose BitGo custodial wallet?
BitGo’s custodial wallet securely manages digital assets, especially long-term holdings.
Pros:
- Insurance.
- Fast onboarding.
- Depth and breadth of cryptocurrency experience.
- A strong emphasis on security.
Cons:
- Less flexible when it comes to sending money regularly.
- A more standardized approach.
Key features:
- Cold storage with BitGo Prime
- Customizable wallet policies
- Insurance at up to $250M against thief and loss of keys
- Access to DeFi, staking, NFT wallets, and more
- Option to pair custodial wallets with hot wallets
- Velocity controls
Pricing: 1.49% for cryptocurrency purchase, 0.5% crypto withdrawal fee, 0.0005 BTC fee for sending Bitcoin, no receiving fee. 0.25% transaction fee on all instant transactions above one bitcoin.
Security: Address pre-approvals, cold storage custody, regular audit by regulatory authorities, multi-sig and TSS technology, KYC/AML compliance controls, insurance coverage on the market today up to $100M in digital assets
User experience: BitGo’s custodial wallet is well-known for its secure and user-friendly design, featuring multi-signature security, multi-user policy controls, and configurations for reliable asset movement.
Supported cryptocurrencies: Over 600 tokens across a wide variety of blockchains.
Reputation: BitGo is recognized for its strong security, insurance coverage, regulatory compliance, user-friendly experience, broad cryptocurrency support, and flexible wallet options, setting it apart in the cryptocurrency wallet space.
Licensing and regulation: Regulated by NYDFS.
#5: Binance
The Binance Web3 Wallet is integrated into the Binance app, empowering users in decentralized finance (DeFi). It’s a secure gateway allowing users to manage their cryptocurrencies.
Users can execute token swaps across multiple chains, earn yields, and engage with various blockchain platforms and applications (dApps).
Why choose the Binance custodial crypto wallet?
Binance Web3 Wallet is a secure and user-friendly cryptocurrency wallet that allows users to interact with multiple blockchains, trade thousands of tokens, generate returns, and explore top decentralized applications.
Pros:
- Fast onboarding process.
- No significant price fluctuations.
- Some of the lowest trading fees.
- Access the Binance Chain, Binance Smart Chain, and Ethereum network.
Cons:
- Unregulated in multiple jurisdictions.
- Binance stores users’ private keys.
- Poor customer support.
Key features:
- Enhanced swap options
- 19 newly integrated dApps
- Access to 29 DEXs and 15 bridges
- Available for Android and iOS devices
- 24/7 customer support
Pricing: Free crypto deposits, a 0.1% to 0.02% trading fee. Flat fees for transactions involving Binance wallets, payment methods, and network fees depend on the cryptocurrency.
0.50% fee for each trade, 3.99% for credit card transactions, and 1.49% for purchases made through Coinbase wallet or bank account.
Security: 2FA, biometric fingerprint logins, AES-256 encryption for securing digital wallets, Multi-Party Computation, malicious contract detection,
User experience: Binance wallet is liked for its security, low fees, and many coins. Yet, some users face issues with platform complexity, customer support, and regulations.
Supported cryptocurrencies: 350+ cryptocurrencies.
Reputation: Generally well-regarded as a prominent cryptocurrency exchange, it supports many coins and maintains low trading fees.
Licensing and regulation: Granted licenses in Abu Dhabi Global Market, Bahrain, Dubai World Trade Center, France, Italy, Japan, Kazakhstan, Lithuania, Poland, Spain, and Sweden.
#6: Bitfinex
Bitfinex, a cryptocurrency exchange owned by iFinex Inc., was founded in 2012. It offers low fees, high security, and a custodial wallet for secure storage of digital assets.
Bitfinex has a global presence and extensive cryptocurrency support, making it a popular choice for trading and holding digital assets.
Why choose Bitfinex custodial wallet?
Bitfinex is a user-friendly custodial wallet from a reputable exchange providing advanced trading options.
Pros:
- High-security emphasis
- User control
- Wide cryptocurrency support
- User-friendly interface
Cons:
- Only about 0.5% of crypto assets are accessible in hot wallets for daily operations.
- Limited flexibility.
Key features:
- Cold storage
- Automatic real-time backup
- Segregation of assets
- Integration with Bitfinex trading platform
- Global reach
Pricing: 0.0-0.2% trading fees, crypto deposits are free, withdrawing digital assets to another Bitfinex user’s address incurs no charges. Deposits through bank wire cost 0.1% (min 60 USD/Euro).
Security: 2FA, whitelisting, a withdrawal confirmation phrase, Let Session Expire feature, OpenPGP Email encryption, advanced API key permissions, protection from DDoS attacks.
User experience: Bitfinex simplifies trading with clear instructions for buying and selling cryptocurrencies. Professional traders appreciate advanced features. However, beginners may be concerned about security issues and limited payment options.
Supported cryptocurrencies and partnerships: 170+ cryptocurrencies.
Reputation: Bitfinex has had a mixed past with security breaches and controversies. Despite this, it’s a well-established and reputable cryptocurrency exchange with various features and advanced trading options.
Licensing and regulation: Bitfinex is regulated in Seychelles for International Business and holds a DASP license in El Salvador.
#7: Cobo Wallet
According to Cobo, it stands out as the initial digital currency wallet introducing Proof of Stake (PoS) and master node pooling. This innovation allows you to securely store, use, and invest in digital currencies within a single app.
Why choose a Cobo crypto wallet?
Cobo Wallet provides an array of features and robust security measures. However, it’s crucial to understand that the platform primarily caters to institutional and large investors.
Pros:
- All in one app.
- Available in 80+ countries.
- Various security features.
Cons:
- It does not provide direct integration with fiat currencies.
- Limited support for smaller cryptocurrencies.
- A China-based platform may worry some users, as it might face government regulations and restrictions.
Key features:
- Hot-cold storage
- Access to dApps
- Cloud pool staking
- Multi-chain ecosystem
- Partners with ETH, EOS, TRON and other teams.
Pricing: Free, instant transfers between Cobo Wallet users. 0.01% maker fee and 0.075% taker fee. The commission rate on the platform begins at 0.155%.
Security: HSM bank-level security, payment passcodes, Google 2FA, KYC compliance, and private keys stored in multi-signature cards.
User experience: Cobo is a user-friendly cryptocurrency wallet. They redesigned their website to showcase their values, as seen in an EL Passion case study.
Supported cryptocurrencies: 70+ chains and 1,800+ tokens.
Reputation: Cobo Wallet has strengths in security and features. However, there are drawbacks, such as complexity, higher fees, limited compatibility, and the potential for technical problems. Yet, some Amazon reviews suggest the Cobo Wallet Pro may not fully deliver on its features.
Licensing and regulation: According to the official website, Web 3.0. Cobo is SOC2 Type 1 and Type 2-compliance-certified and licensed in 4 jurisdictions.
#8: Freewallet
Freewallet, a fintech company, has been part of the cryptocurrency scene since 2016. It serves 3 million users with mobile apps and a web version of a wallet. The platform supports 100+ cryptocurrencies.
Why choose the Freewallet?
Freewallet is a multi-currency crypto wallet with various features, making it a good choice for some users.
Pros:
- Many available cryptocurrencies.
- Wide device compatibility.
- Immediate token exchanges.
- A user-friendly interface.
Cons:
- Questionable customer support.
- Limited control over your assets.
- Limited support for decentralized applications.
Key features:
- Web3 crypto wallet option
- Side-chain technology
- exchange rate tracking
- Option to store 150+ cryptocurrencies
- 100+ currencies to exchange
- You can top up your mobile phone with Bitcoin (BTC).
- Over 400 operators support in 100 countries.
- Option to create an account with your email, Facebook, Apple, Google account, or mobile phone number.
Pricing: No network fees for crypto exchange, zero in-app fees, 30 USDT monthly fee for Freewallet account maintenance.
Security: 2FA, pin-code and Fingerprint support, multi-signature confirmation, cold storage, modern encryption methods.
User experience: The user experience with Freewallet varies, as some users appreciate its simplicity and reliability, while others caution against using it due to security concerns.
Supported cryptocurrencies: 50+ coins and ERC20 tokens.
Reputation: The Freewallet is a decent platform offering various features. In 2017, however, it faced controversy. Some users accused it of stealing funds. A Reddit post claimed that Freewallet had stolen over $8 million worth of Ethereum.
Licensing and regulation: End-User License Agreement accessible at EULA. The EULA grants users a limited, non-sublicensable, worldwide, non-assignable, non-exclusive, and royalty-free license to use the software and intellectual property.
#10: Poloniex
Poloniex is a global cryptocurrency exchange backed by Justin Sun, the founder of Tron. It was originally established in 2014 in Delaware but is currently unavailable in the United States. The Poloniex is known for its wide selection of altcoins, margin trading, and crypto lending.
Why choose a Poloniex crypto wallet?
Poloniex is a crypto exchange with many altcoins, margin trading, and crypto lending. It has a user-friendly custodial wallet, good liquidity, and offers a wide range of cryptocurrencies. With low trading fees, this crypto wallet is an affordable choice for swapping cryptocurrencies.
Pros:
- Many various features.
- Rewards for simplified staking.
- Option to buy and sell crypto assets using credit and debit cards.
Cons:
- Poor customer support.
- Security concerns.
- High fees for margin trading and futures trading.
Key features:
- 500+ spot trading pairs
- 85 DeFi assets
- Trade of leveraged tokens
- Real-time quote updated for all markets
- Price alerts
- Option to trade spot, futures, contracts and others
- Low latency API
Pricing: -0.0050-0.20% maker fee and 0.10-0.20% taker fee.
Security: Multi-layered risk management system, cold storage wallets, encryption protocols, hardware wallets, multi-signature wallets, multi-factor authentication, and KYC and AML procedures.
User experience: Poloniex has improved its platform for a better user experience. They introduced a new trading system focused on optimal speed, resilience, and practicality for skilled and global retail users.
Supported cryptocurrencies: 400+
Reputation: Poloniex is a legitimate cryptocurrency exchange. However, according to Coindesk, in November 2023, hackers emptied Poloniex’s hot wallets, causing an estimated loss of around $114 million, according to on-chain data.
Moreover, Poloniex is facing scrutiny from regulators in the U.S., Canada, and the U.K. for alleged illegal securities practices.
Licensing and regulation: Not regulated by the SEC or FSA. Also, while Poloniex is based in the United States, it is not regulated by the SEC, FINRA, or SIPC.
Comparison between top-rated custodial crypto wallets
| Custodial Wallet | Number of Currencies | User Experience | Security | Reputation |
| Coinbase | 240+ | Good | High | Good |
| Gemini | 80+ | Mixed | High | Good |
| BitMEX | 100+ | Good | Medium | Mixed |
| BitGo | Over 600 | Excellent | High | Good |
| Binance | 350+ | Mixed | High | Mixed |
| Bitfinex | 170+ | Mixed | High | Good |
| Cobo Wallet | 70+ | Good | High | Good |
| Freewallet | 50+ | Mixed | Low | Mixed |
| Poloniex | 400+ | Mixed | Mixed | Mixed |
Why choose a custodial wallet?
You should choose a custodial wallet because it is easy to use, more secure than a non-custodial wallet, and offers a backup recovery option.
How to choose the best custodial wallet for beginners and non-technical users
If you want to find the best custodial wallet for beginners and non-technical users, consider several factors:
User-friendliness
The user interface should be as simple and clear as possible. Navigating through the digital wallet and making basic transactions should be easy. In addition, avoid wallets with complex settings or intricate technical requirements.
Also, consider whether you want to use the wallet on mobile, desktop, or both.
Security
Custodial wallets handle your private keys. Therefore, choosing one with a flawless reputation and high security is crucial. Look for wallets that employ multi-signature authentication, cold storage for offline storage of funds, and regular audits.
Supported cryptocurrencies
Now, it’s not about how many. Seek platforms that support the currencies you wish to buy or sell. Go for platforms with more options if you want to try trading less common currencies soon.
Fees
Custodial wallets typically charge fees for various services, such as transactions, withdrawals, and storage. Before choosing a wallet, compare fees to find a balance between being affordable and having competitive pricing.
📚Read More: How to Choose a Right Crypto Wallet
📚Related:How to Choose Crypto On and Off-Ramp Platform
How do custodial wallets work?
Custodial wallets work with a trusted centralized third-party service provider that stores and manages private keys on behalf of its users. These crypto wallets often come with centralized exchanges, letting you use regular money to buy cryptocurrencies.
What are the pros & cons of custodial wallets?
Here are the main benefits of custodial wallets and their disadvantages.
Advantages of custodial wallets
- Convenience: Easy to use without worrying about backing up or managing private keys.
- Security: Typically more secure due to the custodian’s expertise and resources in protecting funds.
- Accessibility: Accessible globally through a web browser, mobile app, or hardware device.
- Support: Better customer support compared to non-custodial wallets; custodians can assist with any issues.
Disadvantages of custodial wallets
- Trust: Reliance on the custodian to safeguard funds, risking loss if the custodian faces hacking or closure.
- Fees: Charges for services, accumulating over time.
- Limits: Restrictions on deposit and withdrawal amounts.
- Control: Limited control over funds, with the custodian having the authority to freeze or seize them.
Are custodial wallets secure?
According to scientists, custodial crypto wallets have a higher chance of involving in major security incidents and fraud. From the well-known collapse of Mt. Gox in 2014 to the recent downfall of FTX, custodial services have a history of significant failures.
Others state that despite recent research pointing out security and privacy issues in popular audibility protocols. According to them, many top exchanges incorrectly use research proofs, undermining their intended purpose.
What are the risks of a custodial wallet?
Safety: If the wallet provider faces a data breach, mishandles funds, or shuts down, users risk losing all their money.
Dependency: Using a custodial wallet involves giving control to a third party. The custodian can freeze or seize your funds if they suspect illegal activities or face regulatory pressure.
Transparency: Custodial wallets typically lack the openness of non-custodial wallets. It poses a challenge to understand how it handles your funds.
Regulatory changes and legal issues: Changes in regulations and legal problems, like lawsuits or bankruptcies, can impact custodial wallets. It can cause higher fees, compliance costs, or even the closure of some custodial wallet providers.
What is the difference between a custodial and a non-custodial wallet?
The main difference between a custodial and a non-custodial wallet is how private keys are controlled.
With a custodial wallet, the third-party service provider stores and manages private keys. Also, the wallet provider is responsible for the safety of user funds.
With the non-custodial wallet, you have complete control of your private key. As a result, a non-custodial wallet offers higher security but demands more technical expertise.
When using a non-custodial wallet, the user needs to ensure the safety of their private key because losing them results in losing access to the funds.
Which is better: a custodial or non-custodial wallet?
There is no straightforward answer to which is better: a custodial or non-custodial wallet. It mainly depends on the aspect you are evaluating and personal preferences.
However, there are things you need to take into consideration.
Custodial Wallets:
- Pros: Simple for beginners, users can reset passwords, less responsibility.
- Cons: Third-party controls private key, vulnerable to hacking, requires trust.
Non-Custodial Wallets:
- Pros: Users control keys, it is quick to create new wallets, unaffected by exchange hacks, no KYC/AML process.
- Cons: Irrecoverable if the private key is lost, requires technical know-how for advanced features.
📚Related: Different Types of Crypto Wallets
Conclusion
We’ve highlighted the best custodial wallets like Coinbase, and Gemini, each with unique features.
When choosing from provided crypto wallets, consider these factors: security, ease of use, supported cryptocurrencies, and fees. While custodial crypto wallets offer convenience, not relying on a third party can avert potentially higher fees.
Prioritize security by assessing the platform’s reputation, regulatory compliance, and insurance coverage. Whether you’re a beginner or experienced, finding a balance between convenience and security is essential for a successful custodial wallet experience.
Methodology: How we chose the top custodial wallets
We reviewed independent sources and user feedback to evaluate custodial crypto wallets, considering features, pros and cons, security, pricing, and compliance. Information was gathered from official websites and reputable review platforms.
We focused on custodial wallets with lower fees, more features, and strong security. We also evaluated the platforms’ user interface and reputation and noted our findings.
FAQs
What are examples of custodial wallets?
Here are examples of custodial crypto wallets: Bitfinex, Gemini, Coinbase, and BitGo.
What is the best custodial wallet for crypto?
The best custodial wallet for crypto varies based on your specific needs and preferences. However, here is a short list of the five best custodial wallets:
- Coinbase
- Gemini
- BitMex
- BitGo
If you are looking for other wallet solutions in the UK, read more about the Best Crypto Wallet in the UK: 18 Top Picks for 2024.
What is the most trusted custodial wallet?
What is the difference between custodial and non-custodial wallets?
Does Kraken have a crypto wallet?
Kraken is an exchange, not a wallet service. You can deposit funds into our corporate wallet for safekeeping during exchanges, trading, or staking, but we don’t provide personal wallet services.
Deposited funds go to secure storage and active wallets. Withdrawals use a separate address.
Read More:
