Clear DefinitionsDigital Asset Custodian
1 min read
Pronunciation
[di‑ji‑tl as-et kuh-stoh-dee‑uhn]
Analogy
A digital asset custodian is like a bank vault service for cryptocurrencies.
Definition
A regulated entity that holds and safeguards digital assets on behalf of clients, offering security, compliance, and insurance services.
Key Points Intro
Custodians protect assets via:
Key Points
Institutional security: HSMs, multi-sig, cold storage.
Regulatory compliance: KYC/AML, audits.
Insurance coverage: Protection against theft.
Operational services: Reporting, staking, settlement.
Example
Technical Deep Dive
Custodian uses FIPS-certified HSM clusters, strict key ceremony, multi-region redundancy. Access governed by multi-party approval workflows. Compliance modules generate audit trails and regulatory reports.
Security Warning
Custodian insolvency or regulatory seizure can freeze assets.
Caveat
Counterparty risk remains; choose custodian with strong regulation and insurance.
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