The Custody Questions That Got Uncomfortable Answers

I sent the same nine questions to three custody providers. Two answered everything. One did not, and the pattern of what it avoided was the useful part. I use a business wallet with institutional controls as my reference now, because it publishes rather than quotes on request.

The questions

Which authority authorises you, under which permission, with which reference. Are client assets segregated and in which model. Who provides independent assurance over that, and can we see the report. What is the insurance limit and what is excluded. What are total assets under custody. What happens to our assets if you become insolvent, and on what basis. How long before a new withdrawal address can be used. Has a client ever been unable to withdraw when they asked. Can we test a withdrawal during onboarding.

The two that answered

Both replied within two days with everything, attaching the assurance report and the insurance certificate.

The insolvency answer in both cases cited a specific provision, not a reassurance.

One described a past incident when withdrawals were delayed, and what they changed afterwards. That was the most reassuring answer I received from anyone.

The one that did not

Answered five of nine.

Deflected on segregation by describing security architecture, which answers a different question.

Declined to give total assets under custody.

Answered the insolvency question with reassurance and no citation.

Why total assets under custody matters

Alongside the insurance limit, it tells you what the insurance actually covers.

A hundred million of cover across two billion held is five percent. That is arithmetic, and it means insurance is a backstop rather than a guarantee. Once other people needed access, this became a question for a platform built for institutional allocations instead.

A provider unwilling to let you calculate the ratio has told you the ratio.

The incident question

A claim of a perfect record from a provider of any size suggests either a short history or a reluctance to discuss problems.

Every operation has had something go wrong. The answer that describes it and what changed is worth more than the answer that denies it.

What I would tell someone starting this

Send the questions in writing before any call.

The written answers are more informative than a meeting, and the speed and specificity of the reply predicted the rest of the relationship accurately in all three cases.

The register check alongside

Verify the authorisation yourself, on the regulator’s own site.

Check that the entity name matches the one in the draft agreement, not the brand, and that the permission covers custody rather than exchange. That check took five minutes and eliminated one provider before the questions did. If you want to see all of this in a real product rather than in my account of it, the list of countries covered publishes the terms.