There are two main types of crypto wallets: custodial, and non-custodial.
A non-custodial wallet does not allow the wallet company to know your private key, which is required to access the wallet and authorize transactions. A custodial wallet gives the wallet company a copy of your private key, so they can access your wallet and transact for you.
As the owner of a non-custodial wallet, you are responsible for keeping track of your 12-word seed phrase. If it the seed phrase; you will be unable to access your wallet—there is no “forgot password” option. However, a non-custodial wallet is also more secure than a custodial wallet. There is no risk of losing your funds if the custodian is hacked. Zelus is a non-custodial wallet, providing users with top-level security.
On the other hand, a custodial wallet means the custodian has access to your funds. Instead of a seed phrase, you log in with a username and password. If you forget your password, the company can give help you regain access to your wallet. However, you are trusting the company to not misplace or lose your funds. Custodial wallets are thus considered less secure. Companies like Coinbase, Binance, and FTX offer custodial wallets.