--- question: "Who legally owns crypto held in a custodial account?" description: "It depends on the customer agreement, not the balance you see. Some terms hold assets for you; others transfer title and leave you an unsecured creditor." topic: "Custody & exchange safety" jurisdiction: "US" published: 2026-08-01 author: "Zion Labs" canonical: https://www.zionlabs.io/answers/who-owns-crypto-in-a-custodial-account answer: "It depends on what the customer agreement says and how the assets are actually held — not on the balance shown in the app. Where a platform holds assets in custody for you, segregated from its own and recorded as belonging to you, the beneficial interest stays yours. Where the terms transfer title to the platform, the assets can be treated as the company's property: in January 2023 a US bankruptcy court held that under the plain language of one crypto lender's terms of use, customers had transferred ownership of deposits in its rewards programme, making them presumptively property of the bankruptcy estate and the customers unsecured creditors. Read the agreement for the specific product you are using." --- # Who legally owns crypto held in a custodial account? ## Answer It depends on what the customer agreement says and how the assets are actually held — not on the balance shown in the app. Where a platform holds assets in custody for you, segregated from its own and recorded as belonging to you, the beneficial interest stays yours. Where the terms transfer title to the platform, the assets can be treated as the company's property: in January 2023 a US bankruptcy court held that under the plain language of one crypto lender's terms of use, customers had transferred ownership of deposits in its rewards programme, making them presumptively property of the bankruptcy estate and the customers unsecured creditors. Read the agreement for the specific product you are using. ## Nuances and considerations - **The contract is the controlling document, and different products in the same app can have different terms.** A plain custody balance, a rewards or earn balance, and a margin balance are often governed by separate sections that allocate ownership differently. The Celsius ruling turned on the specific wording of the terms governing one programme, not on crypto generally. - **"Property of the estate" is the phrase that matters in an insolvency.** If title passed to the platform, your claim is a claim against the company alongside other unsecured creditors, and the outcome depends on what is left. The court in that case left room for individual customers to rebut the presumption on their own facts, which is a much weaker position than never having transferred title. - **Regulators are pushing on the structure, not the marketing.** NYDFS guidance updated on 30 September 2025 tells licensed virtual currency custodians to separately account for and segregate customer assets from corporate assets, to title accounts for the benefit of customers, and not to use customer assets for their own purposes or as collateral for their own obligations. Where those controls are in place, the customer's beneficial interest is the thing being protected. - **Insurance is not the answer to this question.** The FDIC does not insure crypto assets, and deposit insurance does not protect against the failure of a non-bank crypto custodian, exchange, broker or wallet provider. Any reassurance built on the word "insured" is answering something else. - **This answer describes US law and US insolvency outcomes.** Custody, title and insolvency priority are jurisdiction-specific, and the entity you actually contract with may not be in the country you think it is. ## What to check in your customer agreement 1. Does it say assets are held **in custody** or **in trust** for you — or does it grant the platform **title**, or the right to use, lend, pledge or rehypothecate them? 2. Are customer assets **segregated** from the company's own assets, and are they held in individual or omnibus wallets? 3. Which **specific product** are you in? Custody, earn, staking and margin balances are frequently governed by different terms. 4. Which **legal entity** is your counterparty, and in which jurisdiction would an insolvency be heard? 5. What does the agreement say happens **on insolvency** — and does any marketing you were shown imply something different? ## Sources - [Read Before You Click "Accept": Judge Glenn Rules That Earn Account Crypto Assets are Property of Celsius' Bankruptcy Estates and Not Customer Property](https://www.arnoldporter.com/en/perspectives/advisories/2023/01/read-before-you-click-accept) — Arnold & Porter. Supports: The 4 January 2023 ruling that the terms of use transferred title, that the assets were presumptively estate property, and that the presumption remained rebuttable for individual customers. - [Celsius Bankruptcy Court Holds Customer Deposits in "Earn Accounts" Are Estate Property](https://www.mofo.com/resources/insights/230109-celsius-bankruptcy-court-customer-deposits-earn-accounts) — Morrison Foerster. Supports: That the decision turned on contract formation and the plain language of the terms of use, and that affected depositors were left holding unsecured claims. - [Industry Letter — Updated Guidance on Custodial Structures for Customer Protection in the Event of Insolvency](https://www.dfs.ny.gov/industry-guidance/industry-letters/il20250930-updated-guidance-custodial-structures) — New York State Department of Financial Services. Supports: That NYDFS expects licensed custodians to separately account for and segregate customer virtual currency from corporate assets, use for-benefit-of account titling, and avoid a debtor-creditor relationship in which the custodian gains a proprietary interest. - [Fact Sheet: What the Public Needs to Know About FDIC Deposit Insurance and Crypto Companies](https://www.fdic.gov/news/fact-sheets/crypto-fact-sheet-7-28-22.html) — Federal Deposit Insurance Corporation. Supports: That the FDIC does not insure crypto assets and that deposit insurance does not protect against the insolvency or bankruptcy of a non-bank entity, including crypto custodians, exchanges and wallet providers. ## Related questions - https://www.zionlabs.io/answers/is-proof-of-reserves-the-same-as-an-audit - https://www.zionlabs.io/answers/what-does-a-crypto-exchange-license-actually-cover - https://www.zionlabs.io/answers/what-is-a-money-transmitter-license