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Crypto Terms:  Letter T
Jun 19, 2023 |
updated Apr 02, 2024

What is Trust?

Trust Meaning:
Trust - defines a three-party arrangement where a trustor authorizes a trustee to hold specific assets for the benefit of the beneficiary.
2 minutes

Let's find out Trust meaning, definition in crypto, what is Trust, and all other detailed facts.

A Trust is a fiduciary relationship between three parties - a trustor, a trustee, and a beneficiary. It’s established when a trustor allows a trustee to hold specific assets or property for the benefit of the beneficiary.

The main purpose of a trust is to offer a trustor legal protection regarding their assets or property. A trust ensures that the trustor's assets or property are in a safe environment.

By employing a trust, all parties of the arrangement can minimize the amount of paperwork needed to be done as well as save time and money. Additionally, it can help to reduce or even entirely eliminate estate or inheritance taxes.

When it comes to the crypto sector, certain investors prefer to employ trusts to protect and secure their digital assets. Additionally, a trust can help evade risks that generally happen within traditional services.

Trust companies are often employed to take the role of fiduciaries. They offer institutional-grade custodial controls such as extra counterparty security and protection, cases for hacker attacks and theft, and enhanced transparency and reporting are among the features trust companies provide. 

It’s usually the inexperienced ones that can benefit the most from this type of arrangement.