Segregated wallets
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In a segregated model each client has her own on-chain address controlled by the custodian. The chain itself shows the client's balance, although the custodian holds the key. This is how most institutional custodians, including Swiss banks offering crypto custody and Singapore's licensed custodians serving funds, structure their service. The segregated model is costlier to operate but produces a cleaner legal result in both hubs.
In Switzerland, segregated holding falls under Art. 242a para. 2 lit. a DEBA, which covers assets held "individually" for the client and requires no attribution exercise at all. In Singapore, the segregated address supplies the certainty of subject matter that the law of trusts requires, which removes the strongest objection to treating the customer as a beneficiary. In both, the segregated address makes the client's position visible to auditors, regulators and the client herself, who can watch her own balance on a block explorer. MAS's 2023 consultation response on customer protection pushed DPT licensees toward trust arrangements over customer assets and required daily reconciliation, an approach that is far easier to evidence with segregated addresses.1
| Feature | Omnibus | Segregated |
|---|---|---|
| Chain shows | Custodian's pooled balance | Each client's own balance |
| Client entitlement proven by | Custodian's internal ledger | The chain plus the custody agreement |
| Swiss insolvency release | Art. 242a para. 2 lit. b DEBA, if readily attributable | Art. 242a para. 2 lit. a DEBA |
| Singapore insolvency position | Depends on trust analysis and certainty of subject matter | Trust more readily established |
| Operating cost | Low | High (one key set per client, network fees per movement) |
| Typical users | Retail exchanges | Banks, fund custodians, family offices |
| Audit of holdings | Requires reconciliation of books to chain | Visible per client on chain |
Notes
- MAS, Response to Feedback Received on Proposed Regulatory Measures for Digital Payment Token Services (Part 1), 3 July 2023, sections 2 and 3 (segregation of customer assets under a statutory trust; daily reconciliation; separate custody function). See 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.