Custody Compliance Framework

Definition ∞ A Custody Compliance Framework outlines the policies, procedures, and controls implemented by an entity to meet regulatory requirements for safeguarding client assets. This framework ensures adherence to legal and industry standards for asset protection, operational security, and reporting. In the digital asset sector, it addresses the specific risks and regulations associated with cryptocurrency custody.
Context ∞ The current state of Custody Compliance Frameworks in crypto is evolving rapidly as regulators worldwide seek to establish clear rules for digital asset custodians. A critical discussion involves defining what constitutes a “qualified custodian” and the appropriate level of security and insurance required. Future developments will likely lead to more standardized and robust frameworks, enhancing trust and institutional participation in the digital asset market.