<aside> ⚠️ Sinbad never holds your funds as your keys are generated on your own device and you can verify the balance of your wallet independently.

However, the current beta version of Sinbad is a semi-custodial wallet because service providers used by Sinbad retain some control over your funds.

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Traditional banking

In the world of finance, it’s common for banks and other financial service providers to have full control over your assets. Even though you may legally own the money in your bank account, the bank has the power to deny your withdrawal requests and may make decisions that are not in your best interest. Additionally, factors outside of the service provider's control, such as government regulations, can prevent you from accessing your assets.

In general, your money can be stored in 2 ways:

• By a bank: Your cash is stored by a bank meaning you are trusting a third party custodian.
• By yourself: Cash is in your pockets or in a safe at home meaning you are self-custodying your assets and not relying on anyone’s trust.

Why is ownership important?

If you don't own your money in cash, the government or bank can seize it at any time or force you to manage it in a certain way (i.e. capital control). For example, during a financial crisis or political unrest, governments may freeze bank accounts or limit access to funds. By owning your money, you can protect yourself against government seizure and ensure that you have access to your funds when you need them.

With fiat, this means holding cash at home. In the crypto space, this means knowing the private key to your wallet.

What’s ownership in crypto?

Because cryptocurrency wallets are digital, owning your assets looks a bit different than holding cash in your hands. For digital assets like USDC and Bitcoin, whoever knows the private key to the crypto wallet becomes the owner of its funds. For crypto wallets, this private key is called a private key and is essentially a string of characters.

<aside> 💡 E9873D79C6D87DC0FB6A5778633389F4453213303DA61F20BD67FC233AA33262 Please note that this is a sample private key—do not import it.

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Being the owner, or custodian, means you can spend and manage those funds freely. If you do not have control over your private keys or if you are not the only one with access to them, then that crypto isn't truly yours.