Definition ∞ Chain of Custody refers to a documented chronological sequence of possession, control, transfer, analysis, and disposition of physical or digital evidence or assets. In the context of digital assets, it verifies the integrity and authenticity of an asset’s ownership history. This record helps ensure that an asset has not been tampered with or illicitly accessed.
Context ∞ The chain of custody is a critical concept in digital asset security, regulatory compliance, and legal proceedings involving cryptocurrencies. It is particularly relevant for institutional investors and custodians who must demonstrate secure handling and verifiable ownership of digital holdings. Establishing an unbroken chain of custody builds trust and reduces counterparty risk in the digital asset ecosystem.
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