Custody is a trading decision

In every other track, counterparty questions arrived mid-course. Crypto's seed put custody in module 1, and the reason is structural: here, where the asset is a key-controlled entry, custody IS ownership - and the alternative is a creditor's claim.

The two custodies

• Self-custody: the holder's keys, the holder's coins - ownership in lesson 1's full sense. The risks are personal and mechanical: keys lost are coins lost, with no issuer to appeal to; theft, error and inheritance all become the holder's own operational problems.
• Exchange custody: the venue holds the keys; the customer holds a balance in the venue's database - a claim on a company, not an entry on the ledger. Convenient, necessary for active trading - and an unsecured credit exposure to a business, in an industry whose failures are large and documented.

The record, dated

The claim's risk is not theoretical. In 2014 the then-largest exchange collapsed with customer coins missing; in November 2022 one of the largest global venues failed with customer balances unbacked - both on the public record, both total losses for many claimants at the time, both discovered by customers who believed a balance was a coin. The platform states these as the commodities track stated its regime breaks: dated, factual, and load-bearing - the asset class's defining risk events were custody events.

The trading decision

The seed's phrase, made operational: custody is decided per purpose, not per ideology. Trading float on venues - sized as counterparty exposure, per module 4's machinery, because that is what it is; holdings in self-custody - where ownership is actual and the risks are ones preparation can manage; and the split reviewed like any position, because it is one. The platform's other tracks asked 'whose promise are you holding?' as a wrapper question; crypto asks it of the account itself - and this track will not let the question retire.