What is crypto custody?

Broadly speaking, crypto custody means securing crypto assets from theft.

Custodians have existed in traditional banking for decades, but crypto custody works differently. Taking ‘custody’ of crypto assets means guarding a user’s private keys – the part of a crypto wallet that grants access to the funds held in it.

Or, as MiCA, the new European regulatory framework for crypto assets, puts it: “custody and the administration of crypto assets on behalf of clients” means “the safekeeping or controlling, on behalf of clients, of crypto assets, or the means of access to such assets… in the form of private cryptographic keys”.  

If you’re storing crypto assets for investment, you might use a crypto exchange, specialist crypto custody provider or custodial bank to protect your private keys. 

If you’re using digital assets as part of your payments strategy, your payment provider will take temporary custody of your private keys to move funds on your behalf. 

Payments providers typically have extensive security measures to protect their clients’ funds, including multi-factor authentication and encryption. 

Next, we’ll cover how BVNK stores and protects customers’ crypto assets.

How are crypto assets stored at BVNK? 

As a payments company, we hold customer cryptocurrency funds for a short time while they’re on their way to their destination. 

We apply best-in-class treasury management practices to protect customer funds while they’re in our care.

All customer crypto assets are tracked separately and securely within our internal ledger system. Importantly, we never commingle funds. This means our corporate funds are always maintained separately from customer funds, ensuring the integrity and security of customer assets.

We also have a ‘like-for-like’ storage policy. This means we keep the exact type and amount of cryptocurrency that you deposit, as it is. For example, if you deposit 1 bitcoin, we store 1 bitcoin. We don't convert or change the form of the crypto assets. This approach reduces the risks associated with exchange rate fluctuations and currency conversion.

This layered approach, combining segregation in our ledger, never commingling funds and like-for-like storage, provides maximum protection and transparency.

What other security safeguards are in place?

We store crypto asset private keys safely through a combination of our own security modules and custody partners like Fireblocks and BlockCypher. 

We use industry-leading compliance ciphers to encrypt private keys (the digital codes that secure your assets) and we store decryption keys (codes to unlock your assets) offline. Unlocking them requires multi-party signing.

All BVNK merchant accounts benefit from multi-factor authentication and continuous risk monitoring. We deploy industry leading analytics tools and our own proprietary machine learning models, to detect and prevent suspicious or unusual transactions.

The BVNK platform itself has been developed using security best practices, including defence in depth, the four-eyes principle, audit logging, tracking, reviews and hardening. Our infrastructure has been tested by independent third parties and we carry out ongoing rigorous internal tests, as well as constantly monitoring for and adapting to emerging threats.

For more information on how we protect digital assets, visit our Help Centre or contact a member of our team.