Licensed custodians could help safeguard customer assets being held on exchanges and prevent a repeat of the type of situation that led to FTX's implosion; bitcoin moves into the green late Monday. TheSamReynolds and JPRubin23 report
Imagine for a moment if there were a class of companies whose sole job was to safeguard customers’ assets being held by an exchange or other institution from theft, hacks or misuse by executives. And imagine if these companies were registered with the government, insured and regularly audited, with the results available for the public to inspect.
Quaglini said that with a custodian, clients’ assets are legally and technologically segregated, available for public monitoring via block explorers, and insured. Assets are disclosed, as are liabilities. “The ledger would have been at least managed by an independent party versus the kind of internal ledger that they were using between FTX and Alameda,” said Quaglini. “The frosting on the cake was the ‘hack’ where employees were leaving, nobody knew who was in charge of what, and then all of the sudden funds disappear because you don’t know who’s in control of the private keys.
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