Custody vs non-custody: how your model changes your licensing obligations
Choosing between a custodial and non-custodial crypto business model is not just a product decision; it directly determines which licensing obligations apply to your company, especially under the EU's MiCA framework. CRYPTO LICENSE GUIDE · 2026 Custody vs non-custody: how Crypto licensing across 15+ jurisdictions CONSULTING24.CO The fundamental distinction: custody vs non-custody In the crypto world, custody means holding or controlling a client's cryptoassets or the private keys to those assets. A custodial service provider has the ability to move or dispose of client funds without further authorization from the client. Non-custodial models, by contrast, give the client exclusive control over their private keys and funds; the service provider never takes possession or control. This distinction is critical for licensing because regulators define obligations based on the level of risk and control. Under MiCA, custody of client cryptoassets triggers the highest capital requi...