CFA Level I · CFA Level I Exam · Introduction to Digital Assets
In a digital asset ecosystem, a participant that holds the private keys on behalf of investors and safeguards their digital assets is most likely performing the role of a:
A custodian is the participant that holds private keys and safeguards digital assets for investors. Miners and validators instead verify transactions and add blocks to the ledger, and decentralized exchanges facilitate trading through smart contracts without taking custody of client assets.
- Aminer or validator
- BcustodianCorrect
- Cdecentralized exchange
Explanation
A custodian safeguards private keys and assets for clients. Miners and validators confirm transactions and add blocks to the ledger. A decentralized exchange matches trades through smart contracts, not by holding client keys.
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