Custodia Bank debuts segregated custody accounts service

The “property-rights-respecting” service seeks to minimize risks via segregated accounts, according to Custodia CEO Caitlin Long

article-image

Al Alex/Shutterstock modified by Blockworks

share

Custodia Bank is now offering to hold bitcoin for businesses, as the crypto-friendly company looks to tout a different custody model than some competitors. 

Custodia’s Bitcoin custody platform, designed for fiduciaries, investment advisers, fund managers and corporate treasurers, is now operational in select US states, the company said in a Tuesday X post. 

Certain bitcoin custody models have become “infamous,” Custodia CEO Caitlin Long said in the company’s bitcoin custody white paper — noting the failures of Mt. Gox, FTX and Prime Trust.  

Custodia looks to offer a “property-rights-respecting bitcoin custody service” by using segregated accounts, Long added, which don’t commingle customers’ crypto.

“The omnibus model brings significant risks associated with storage, transfer and potential rehypothecation of customer digital assets, and omnibus accounts can be at risk of bail-ins in the event of a bankruptcy,” the white paper states. “In contrast, segregated accounts minimize those risks and improve transparency and auditability.”

Custodia’s new platform was approved by the Wyoming Division of Banking, the company said in the X post. Through the bank’s custody model, a customer delegates crypto storage to a custodian that stores the assets on-chain.

“The custodian focuses its energy and attention exclusively on safeguarding the private keys that correspond to the customer’s deposit addresses,” the white paper adds. “Assets are not moved and cannot be pledged or rehypothecated to another party for any reason. Nor are the assets moved internally by the custodian.”

Companies have looked to improve crypto custody in an effort to appeal to institutions that may be looking to enter the space, particularly after events like the collapse of FTX last year

About 38% of respondents of a January survey by Bitwise and VettaFi cited custody concerns as a barrier to investing in crypto.

Such efforts also come after the US Securities and Exchange Commission proposed in February to require the “safekeeping of client assets” to what they call “qualified custodians.” 

Bitcoin asset management platform Onramp partnered with BitGo last month to launch a multi-institution custody product that divides key-holding responsibilities to three institutions.

Read more: Onramp, BitGo introduce latest iteration of crypto custody

That approach to custody came a few months after Standard Custody & Trust Company in July sought to blend the security of qualified custody with the control of self-custody as part of a July partnership with L1 Advisors.

Deutsche Bank signaled in September it was set to build digital asset custody and tokenization services by teaming up with crypto infrastructure specialist Taurus.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Maple Finance has successfully navigated significant market challenges through its strategic pivot to secured lending (Maple v2) and the launch of its Syrup product. Syrup has become a primary growth driver, delivering sustainable, outperforming stablecoin yields and rapidly increasing TVL. The upcoming custody-first Bitcoin staking product (istBTC) presents another significant avenue for expansion. Crucially, Maple has achieved operational profitability, a key inflection point that, combined with a fully vested token and active buyback mechanism, strengthens its investment case. While valuation metrics suggest potential undervaluation relative to peers and growth, the primary forward-looking risk identified is the long-term sustainability of its current high-take-rate collateral staking revenue model.

article-image

In 2014, Microsoft virus scanners were detecting viruses in Bitcoin software

article-image

Ledn’s Mauricio Di Bartolomeo explained how this cycle’s been different for the lender

article-image

The shorts looking for funding range from charming animated series to gritty live-action dramas

article-image

Money, it turns out, is emergent, like consciousness

article-image

Bridge flows churn in both directions as risk appetite returns