A self-custodial wallet is a crypto wallet in which the user, not a third party, controls the private keys or recovery phrase. That means the wallet owner can sign transactions directly and recover funds without asking an exchange or custodian for help. The tradeoff is responsibility: if the secret is stolen or lost, the assets can be gone permanently.
In cyber security, self-custodial wallets are high-value targets because malware only needs to capture one secret to move funds. Attackers may use phishing pages, device spyware, malicious browser extensions, or mobile implants to steal seed phrases, private keys, or approval prompts. Defenders focus on keeping secrets offline, using hardware wallets, hardening devices, and treating any request for a recovery phrase as a compromise event. In a wallet-focused intrusion, stealing this secret is often the final step that turns access into direct financial loss.