Wallets can generally be classified as custodial or non-custodial. In a non-custodial wallet, you are the only owner of the private key. Unless you (or a seed phrase) have access to the private key, no one else will be able to see it.



A custodial wallet is similar to today's bank accounts. A Bitcoin wallet is a place to store Bitcoins, but the company that supplies it holds the private keys. The risk of using a custodial wallet is that the company will confiscate your money, go bankrupt or commit fraud and steal your coins.



There is a phrase used in the Bitcoin world that means, 'Not your money, not your bitcoin.' Based on this, the dangers of a custodial wallet are illustrated. On the other hand, few people opt for custodial wallets instead of being in control of their own funds.