Making the Move: Incorporating Digital Assets Into Custody Services

Custody Goes Digital

Blockchain: Fewer safety nets

  • In the event of faulty fraud or AML checks, transactions completed cannot be undone.
  • Operational or administrative errors cannot be reversed.
  • Clients cannot cancel their own transactions.

Market: Developing ecosystem, regulations and processes

  • Difficulties with fraud and AML protection, as aforementioned, due to the immutability principle
  • Difficulties with the incorporation of Know Your Customer (KYC), compliance and other checks into the digital asset transaction verification process and workflow.
  • Ambiguity surrounding regulations; for example, how to meet the definition of “qualified custodian,” due to the proliferation of different digital asset custody types (self-custody, partial custody, and full custody; based on key distribution and wallet types)

Looking ahead

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Tova Dvorin

Tova Dvorin

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Content manager. Recovering reporter. Coffee enthusiast and chronic reader.