The reason you’re being asked about the type of crypto wallet you’re using is to ensure we comply with the UK’s Travel Rule regulation, which came into force for all registered cryptoasset businesses in the UK (including Ramp) on 01 September 2023.
We’re required to distinguish between those customers using a self-hosted wallet (owned and controlled by you), and those using a hosted wallet (owned by you, but under the custody of a cryptoasset business).
Types of crypto wallet
Your wallet can be either hosted or self-hosted, depending on who owns the private keys that allow for control of the associated addresses.
What is a hosted wallet?
A hosted wallet (also known as a custodial or custodied wallet) is a crypto wallet in which a third-party business or provider (in this case, a cryptoasset business) serves as the custodian of your cryptoassets.
Much like a traditional bank or financial institution, the provider that controls these wallets has full control over your assets, granting you intermediated access to your funds in exchange for the convenience of a managed account.
Examples of hosted wallets include:
Crypto exchange wallet addresses, like Coinbase, Binance, Huobi, OKX, or Bitstamp
CeFi crypto lenders, like YouHodler and Swissborg
Crypto multi-platforms, like Crypto.com and Nexo
What is a self-hosted wallet?
A self-hosted (also known as non-custodial or unhosted) wallet grants the owner of the wallet sole and complete control over the private keys that are needed to conduct transactions. This means that whoever owns a self-hosted wallet has full and unrestricted control over the assets it stores.
Examples of self-hosted wallets include:
Standalone software self-hosted wallets like Trust Wallet, Exodus, or Metamask.
Hardware wallets, like Ledger and Trezor, that keep private keys securely isolated from the internet inside of specialized hardware.
Any other types of “cold storage” wallet for which you’re the only one with access to the corresponding private keys. This includes paper wallets, memorizing your seed words, or even just tattooing them somewhere on your body.