Third-Party Custodian Oversight

Replace quarterly manual attestations with a continuous, immutable ledger. Regulators can be granted read-only access to verify asset backing and transaction history on-demand, slashing audit preparation time and costs.

• Example: A fund using a protocol like Fireblocks or Anchorage Digital can provide cryptographic proof of reserves in minutes, not weeks.
• ROI Driver: Reduces external audit fees by up to 40% and eliminates the risk of costly compliance findings.

Prove custodial assets are fully backed 24/7 without revealing sensitive portfolio details. Use zero-knowledge proofs or Merkle tree commitments to provide verifiable evidence to clients and partners.

• Example: Exchanges like Kraken and Coinbase publish regular Proof of Reserves using these cryptographic techniques to build trust.
• ROI Driver: Mitigates counterparty risk, reduces client withdrawal requests during market stress, and serves as a powerful marketing tool for attracting institutional capital.

Eliminate single points of failure in private key storage. MPC technology distributes key shards across multiple parties (e.g., internal teams, board members, the custodian itself), requiring consensus for signing.

• Example: Qredo Network and Sepior offer MPC-based custody where no single entity ever holds the complete key, drastically reducing insider and external theft risk.
• ROI Driver: Reduces insurance costs for digital assets and protects against catastrophic loss, a key concern for CFOs.

Provide your institutional clients with secure, permissioned portals to view their specific asset holdings and activity in near real-time. This moves beyond opaque monthly statements.

• Example: A wealth manager using a platform like BitGo can offer clients a transparent dashboard, improving satisfaction and retention.
• ROI Driver: Differentiates your custody service in a competitive market, reduces client service inquiries, and strengthens long-term contractual relationships.

Replace costly, manual quarterly audits with real-time, cryptographically verifiable proof of reserves. This provides continuous assurance that client assets are fully backed, reducing audit costs by 60-80% and instantly boosting client trust. For example, a crypto exchange can use a Merkle tree on-chain to prove holdings without exposing individual client balances.

Create a tamper-proof audit trail for all custody actions—deposits, withdrawals, and internal transfers. This eliminates reconciliation disputes and provides regulators with a single source of truth. Key benefits include:

• Automated compliance reporting for frameworks like SOC 2 or MiCA.
• Near-instant forensic analysis in case of disputes or investigations.
• Reduced legal and operational risk from manual record-keeping errors.

Enforce granular, programmable governance for asset movements using multi-signature (multi-sig) smart contracts. Replace slow, email-based approval chains with automated workflows that require pre-defined signatures from officers, auditors, or clients. This reduces transaction settlement times from days to minutes and virtually eliminates unauthorized transaction risk. A practical pilot could involve moving treasury funds between cold and hot wallets.

For institutions custodying tokenized real-world assets (RWAs) like private equity or bonds, blockchain provides an immutable ledger for ownership, dividends, and regulatory status. This automates compliance checks (e.g., accredited investor verification) and enables transparent reporting to beneficiaries. A pilot can track a small portfolio of tokenized assets, demonstrating clear auditability and operational efficiency gains.

By using a shared, immutable ledger between the custodian, client, and auditor, you eliminate the risk of data manipulation or disputes over transaction history. This "single source of truth" drastically reduces the operational overhead of reconciling statements and investigating discrepancies, leading to direct cost savings in back-office operations and stronger client relationships.