Definition ∞ Trust company supervision refers to the regulatory oversight applied to financial institutions that manage assets for others, ensuring adherence to legal and ethical standards. This oversight typically involves examinations of capital adequacy, risk management practices, compliance with fiduciary duties, and operational controls to protect client interests. For digital asset custodians operating as trust companies, supervision ensures secure asset handling, proper record-keeping, and compliance with anti-money laundering regulations. It provides a framework for secure and responsible management of client holdings.
Context ∞ Trust company supervision is becoming increasingly relevant for entities offering digital asset custody services, as regulators seek to apply established financial safeguards to the crypto sector. Discussions often focus on adapting traditional trust laws to the unique characteristics of digital assets. Future regulatory frameworks will likely expand the scope and specificity of supervision for digital asset trust companies.
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