Best Practices for Securing Digital Assets in Custody

Safeguarding digital assets is paramount for institutional clients navigating the digital asset landscape. Asset managers, venture capitalists, and hedge funds managing these assets must adopt robust security practices to minimize risk. The guide outlines essential strategies for securing digital asset custody while highlighting the benefits of working with a trusted digital asset custodian like Rakkar.  

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Why Digital Asset Security Matters

Digital assets, unlike traditional investments, are stored on decentralized blockchains, making them vulnerable to unique threats such as cyberattacks, wallet mismanagement, and human error. For institutions, securing these assets goes beyond simple storage; it requires robust systems to mitigate risks, maintain client trust, and comply with regulatory standards.  

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1. Partner with a Trusted Digital Asset Custodian

Choosing the right digital asset custodian lays the foundation for secure asset management, reputable custodians should provide:  

• Bank-grade security standards: Security certifications such as ISO 27001, SOC 1, and SOC 2 attestation indicate robust security frameworks and compliant financial reporting standards.  

• Fully segregated accounts and bankruptcy-remote: Dedicated wallets ensure that client assets are stored separately from others, and also from the custodian’s own assets.

• Insurance coverage: Protection against potential losses from theft of private keys provides added confidence.

Rakkar excels as the largest qualified digital asset custodian in Southeast Asia, offering institutional-grade solutions tailored to the needs of institutional clients.  

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2. Utilized Cold Wallet Storage

Due to its offline nature, cold wallet storage offers unparalleled security against cyber threats:  

• Offline protection: MPC-CMP cold wallets are not connected to the internet, eliminating exposure to cyberattacks. Compared to hot wallets, cold wallets in addition to a custodian’s expertise in key protection, provides an ultra-safe measure to safeguard institutional assets.

• Fast transaction processing: Rakkar provides industry-leading SLA, completing cold wallet transactions in just two hours compared to the 24–48-hour industry standard.  

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3. Appropriate Multi-Layered Security and Governance Measures

Effective security relies on multiple layers of proactive and reactive defense design, including. This includes internal governance policies with tailored workflows and access controls using features such as whitelisting, user roles, account policies, or Rakkar’s proprietary quorum feature to minimize internal threats, and fraud risk and prevent unauthorized access.

Rakkar’s custodian platform provides these advanced features, ensuring clients have full control over their digital assets.

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Why Rakkar is the Right Partner

As the largest and fastest-growing digital asset custodian in Southeast Asia backed by SCB10X of Siam Commercial Bank, Rakkar combines bank-backed stability with cutting-edge technology. Offering fully segregated, insured, and highly secure custodian solutions, Rakkar provides one of the largest ranges of token support for over 1,000 tokens across 40+ chains. With 24/7 availability, customizable governance controls, and rapid transaction processing times, Rakkar empowers institutional clients to navigate the digital assets landscape with confidence.  

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Conclusion

Securing digital assets requires a proactive approach, combining advanced technology, strong governance, and expert partnerships. By following these best practices and partnering with a trusted digital asset custodian, financial institutions can mitigate risks, meet compliance standards, and focus on maximizing returns.