How Do Institutional Investors Manage the Custody of Their Crypto Assets?

Institutional investors manage custody through specialized, high-security services known as qualified custodians. These custodians are regulated financial institutions that safeguard digital assets using a combination of technologies like multi-signature wallets, cold storage (offline wallets), and hardware security modules (HSMs).

This approach minimizes the risk of theft from online hacks. Using a qualified custodian is often a regulatory requirement for investment funds, as it ensures assets are held securely and segregated from the fund's own assets.