How to Choose a Bitcoin Custodian

Choosing a Bitcoin custodian is one of the most important decisions you'll make as a Bitcoin holder. The wrong choice can mean losing everything. Here's a systematic framework for evaluating providers.

The 8 Criteria That Matter

We evaluate every custodian across eight weighted criteria:

1. Security (20% weight) — How are private keys managed? What physical and cyber security controls exist? Is there multi-signature or MPC technology?

2. Insurance (15%) — What coverage exists? Who is the carrier? What events are covered and what are the exclusions?

3. Regulatory Compliance (15%) — Is the custodian a qualified custodian? What licenses do they hold? In what jurisdictions?

4. Track Record (15%) — How long have they operated? Any security incidents? What is their reputation?

5. Fee Transparency (10%) — Are fees clearly published? Or do you need to "contact sales"? Opaque pricing is itself a red flag.

6. Withdrawal Flexibility (10%) — How quickly can you access your Bitcoin? Are there withdrawal limits or delays?

7. Reporting & Audit (10%) — SOC compliance? Regular audits? Quality of reporting for tax and compliance?

8. Counterparty Diversification (5%) — Is your Bitcoin with one entity or distributed across multiple?

Red Flags to Watch For

• No published fee schedule
• No proof of reserves or audit
• Yield programs using your deposited Bitcoin
• No insurance or vague insurance claims
• Unregulated or offshore-only jurisdiction