Custody agreement review

Checklist

• Nature of the obligation: does the custodian undertake to keep the specific assets, or an equivalent quantity, available at all times? Any right to use, lend, stake, pledge or rehypothecate defeats segregation.
• Wallet structure: individually allocated addresses or omnibus; if omnibus, how the client's share is recorded and how often reconciled.
• Statement of the legal characterisation: Swiss agreement should reference Art. 242a DEBA and the custodian's undertaking; Singapore agreement should declare the trust and define the beneficial interest as a proportionate share of each asset pool.
• Treatment of forks, airdrops and staking rewards: who receives them, who decides whether to support a fork, and in what time.
• Key management: who holds keys, multi-signature or MPC arrangements, geographic distribution, disaster recovery, and whether the client can verify holdings on-chain.
• Instructions: authorised signatories, authentication, cut-off times, the custodian's right to refuse, and the liability for executed fraudulent instructions.
• Fees and liens: whether the custodian has a lien or set-off right over client assets, which can convert a segregable asset into security for the custodian's claims.
• Liability: standard of care, exclusions, caps, insurance and the cover actually in place (specie or crime insurance, limits, exclusions for hot wallets).
• Sub-custody: whether permitted, who the sub-custodians are, and whether the client's rights survive the sub-custodian's insolvency.
• Reporting: statements, auditor's assurance reports on segregation, access to reconciliation records.
• Termination: notice periods, the delivery procedure on termination, and the time within which assets must be returned.
• Governing law and forum: a Swiss custodian under Swiss law, a Singapore custodian under Singapore law; avoid a third law that neither insolvency court will apply to the segregation question.
• Regulatory status warranties: licence or SRO membership, notification of change of status, and the consequence of loss of licence.
• Confidentiality and data: who may access client data, including blockchain analytics providers and group entities abroad.