Custody selection

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A fund's custody decision follows its vehicle and its regulator. A Swiss L-QIF in contractual or SICAV form requires a Swiss custodian bank, which holds fiat and securities and delegates token custody to a specialist custodian under a sub-custody agreement, with the custodian bank remaining liable for the selection and instruction of the sub-custodian.¹ The Swiss crypto custodians that take fund mandates are banks (Sygnum, AMINA), securities firms and SRO-affiliated custodians. The choice between them turns on the insolvency segregation under Art. 242a DEBA and Art. 16 BankA, which Part D, Chapter IV, analyses. It also turns on whether the fund wants its tokens staked, which requires a custodian that offers staking under the FINMA 2023 guidance.²

A Singapore VCC's custodian is chosen by the manager, who is responsible under the fund-management licence for the safe custody of assets. MAS requires licensed fund managers to place assets with an independent custodian. That custodian must be a licensed bank, a licensed trust company, a licensed custodian under the SFA or, for digital payment tokens, a licensed DPT custodian under the PSA. The segregation rules for DPT custodians in force since 2024 require customer assets to be held on trust in segregated wallets.³ The Singapore custodians that take fund mandates include the licensed arms of the global exchanges and the custody units of the local banks. Many Singapore funds also use Swiss custodians, because Swiss insolvency segregation under Art. 242a DEBA is statutory and tested, whereas the Singapore trust-based segregation has not yet been tested in a custodian insolvency.

Notes

CISA, SR 951.31, Art. 72 and Art. 73 (custodian bank: duties; delegation to third-party custodians in Switzerland or abroad; liability for careful selection, instruction and monitoring). Part D, Chapter IV. ↩
Debt Enforcement and Bankruptcy Act of 11 April 1889 (DEBA; SchKG), SR 281.1, Art. 242a (segregation of crypto-based assets in bankruptcy); Banking Act of 8 November 1934 (BankA; BankG), SR 952.0, Art. 16 no. 1bis; FINMA Guidance 08/2023 of 20 December 2023 on staking. Part E, Chapter VIII. ↩
Securities and Futures (Licensing and Conduct of Business) Regulations, reg. 26 (custody of assets by licensed fund management companies); Payment Services Act 2019, s. 23A and Payment Services (Safeguarding of Customers' Assets) Regulations (DPT custodians to hold customers' DPTs on trust and segregated), in force from 4 October 2024. Part K, Chapter II. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

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SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

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