What a crypto custodian does
- Generates and stores keys, in hardware security modules or by MPC, across hot and cold tiers
- Applies each client's approval policy: who may instruct, limits and allow-lists
- Keeps a record of every client's positions and reconciles it with the blockchain
- Handles events such as forks, airdrops and staking rewards
- Reports: statements, audit trails and evidence for the client's auditors
The service is sold to institutions: funds, exchanges, token issuers, banks and fintechs that prefer not to run key infrastructure themselves.
Who may act as a custodian in the EU
Custody is one of MiCA's crypto-asset services, so a firm needs authorisation as a CASP that names it. Article 60 lets some regulated firms notify their authority instead, at least 40 working days before starting: among them a credit institution, a central securities depository, and an investment firm for services equivalent to those it is already authorised for.
A custodian that uses another provider for custody may use only an authorised CASP, and tells its clients. Issuers of asset-referenced tokens place reserve assets with a custodian that is a separate legal person.
Why a product appoints a custodian
A fintech that appoints a custodian still designs the customer experience. The split of roles decides the licence: whichever firm controls the keys is the one providing custody.
Custodian, wallet provider or exchange?
- Wallet-as-a-service provider
- Supplies the technology for creating and operating wallets. Whether it is also a custodian depends on whether it can move the assets.
- Exchange
- Holds customers' assets as a consequence of trading. Safekeeping is a custodian's whole business.
Where a custodian shows up in a platform
Modules that do the work
- Custody & walletsWallets on every major chain, with MPC custody from leading providers or your own keys.
- BackofficeOne console to run the platform: customers, money, risk, content and staff permissions.
- Compliance reportingTransaction monitoring, the Travel Rule and regulatory reports, ready for your regulator.
Platforms that need it
Guides that go deeper
Where it is written
The laws and standards this page's facts come from.
General information, not legal advice: what applies to you depends on your services and your market.