> For the complete documentation index, see [llms.txt](https://help.xaman.app/app/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.xaman.app/app/getting-started-with-xaman/what-is-xumm/understanding-self-custody.md). # Understanding self-custody Custodial, self-custodial, non-custodial, un-hosted: what's the difference? If you're new to crypto, words like "custodial," "self-custodial," "non-custodial," and "un-hosted" can be confusing. They all describe one thing: **who holds your funds.** This article explains the difference, and where Xaman fits in. #### Custodial accounts A bank account is the most familiar example. When you deposit money, the bank holds it for you on its own systems and keeps a record of what you're owed. Since the bank has custody of your funds, this is called a **custodial** (or **hosted**) account. Custodial accounts are convenient, and banks are regulated. The trade-off is that the bank, as the one holding your money, also has a say in when and how you can use it. For example, a bank can freeze or restrict an account during an investigation, when a creditor or tax authority has a claim, or when it decides to block certain kinds of payments. Many people are happy with that trade-off: someone else looks after their money and handles problems for them. #### How exchanges hold your XRP Crypto exchanges work the same way. When you hold XRP on an exchange, the exchange holds it for you. For example, say a friend wants to send you 1,000 XRP. The exchange gives you an **r-address** (an account on the XRP Ledger) and a **destination tag** (your customer number in the exchange's records). Your friend sends the XRP to that r-address, with your tag. That r-address belongs to the exchange, not to you. The XRP goes into the exchange's account, and the exchange adds 1,000 XRP to your balance in its own records. You don't have an account on the XRP Ledger at all: you have an account with the exchange. So your access depends on the exchange. If it restricts withdrawals or goes out of business, you may not be able to get your funds back. When exchanges have failed, some customers have lost their funds, or waited years to recover part of them. #### Self-custodial accounts On the XRP Ledger and Xahau, there's another option: you can create your own account on the network. It has its own r-address, and only you control it, through your account secret. No bank, exchange, or government holds your funds or decides how you use them, and that includes Xaman. This is called a **self-custodial** account. #### Same thing, different names You may also see self-custodial accounts called **non-custodial** or **un-hosted** accounts. All three terms mean the same thing. We use "self-custody" because it says it most clearly: **you** have custody of your own funds. #### Freedom and responsibility Self-custody gives you complete control, but it also means there's no one to call if something goes wrong. No one can reset your account secret, recover it for you, or reverse a transaction, so keeping your account safe is up to you. Before you get started, read [Self-Custody 101: Staying Safe with Xaman](https://help.xaman.app/app/getting-started-with-xaman/self-custody-101-staying-safe-with-xaman). It covers the rules that protect you from almost every scam aimed at self-custody users. #### Xaman: a self-custody wallet Xaman is a self-custody wallet. It helps you create your own XRP Ledger and Xahau accounts safely, manage them, and interact with the ledger directly. * **For extra protection,** Xaman cards keep your account secret on a secure chip, so it can never be copied or shared. See [Getting started with your new cards](https://help.xaman.app/app/xaman-tangem-cards/getting-started). * **Your account doesn't depend on us.** Your funds live on the ledger, not with Xaman. See [What happens to my account if Xaman shuts down?](https://help.xaman.app/app/learning-more-about-xaman/what-happens-to-my-account-if-xaman-shuts-down) #### Questions? If you have questions about self-custody, contact us through the [Xaman Support xApp](https://xaman.app/detect/xapp:xumm.support-md) in Xaman. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation by asking a question. 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