Your capital. Your key. Your beneficiary.
In crypto, custody is the first and last step of trust. Before talking about returns, we talk about where the asset lives, who regulates it, what insurance covers it, and what happens the day something goes wrong. This page is the complete answer.
The fund's capital does not live in a GP's spreadsheet. It lives with regulated custodians who answer to the regulator before they answer to the fund.
Not your keys, not your coins. For institutional, that means qualified custodian.
In retail crypto, self-custody makes sense — a hardware wallet in your drawer solves 95% of the problem. In institutional crypto, it does not. When you manage someone else's capital, the question is not "can I be hacked?" but "what do I tell the regulator, the auditor, the heir and the investor when something goes wrong?". The single answer is: qualified custodian.
A qualified custodian is a regulated entity — trust company, federal bank or broker-dealer — authorised under US law to custody third-party assets under the same standard a bank custodies a bond portfolio. This changes three fundamental things:
- 01Legal segregation. Your capital does not mix with the custodian's balance sheet. If the custodian fails, your asset is yours, not bankruptcy estate.
- 02Continuous audit. Qualified custodians are subject to SOC 1, SOC 2 Type II and periodic regulatory examinations. No individual fund operator can offer that standard.
- 03Real coverage. Lloyd's policies, crime insurance and federal reserves cover specific classes of loss — internal theft, system failure, custodian exploit. It is not magic: it is traditional insurance applied to cryptographic keys.
Four names. None improvised.
Each fund operates with one or more of these custodians, depending on strategy. The specific assignment is documented in the fund's offering memorandum and shared under NDA during KYC.
Fireblocks
US · Israel · MPC + policy engine · trading wallet
The most mature MPC (multi-party computation) infrastructure on the market for managers. The key never exists fully in one place — it is reconstructed only when signing a transaction authorised by policy. Ideal for operational wallets with per-counterparty and per-address limits.
- Regulatory framework
- NYDFS BitLicense (via partners) · SOC 2 Type II
- Coverage
- Lloyd's of London coverage up to $50M, via institutional underwriters
BitGo
US · South Dakota · Qualified custodian · multi-sig hot/cold
Trust company regulated under the South Dakota Division of Banking. Qualified custody under SEC adviser standards. 3-of-5 multi-sig with geographically segregated keys. The client is a direct trust beneficiary, not a creditor in a bankruptcy.
- Regulatory framework
- Regulated trust company · SOC 1 + SOC 2 Type II
- Coverage
- Individual policies up to $250M aggregate
Anchorage Digital
US · Federal · Federal bank · institutional staking
The first federally chartered crypto bank in the United States, authorised by the OCC in 2021. Subject to the same regulatory framework as a traditional national bank. Qualified custody, validator-grade staking, on-chain governance support (voting, delegation, signaling). Highest standard under US federal law.
- Regulatory framework
- OCC National Trust Charter (federal banking)
- Coverage
- Insured under the federal regime · documented internal coverage
Coinbase Prime
US · NYSE: COIN · Prime broker · liquidity + custody
Coinbase Inc.'s institutional arm. Combines qualified custody (per-client segregated cold storage, not commingled) with direct access to liquidity at institutional global exchanges. Public financial reporting as a NASDAQ-listed company — continuous audit under SEC rules.
- Regulatory framework
- NYDFS BitLicense · FinCEN MSB · NASDAQ-listed
- Coverage
- Corporate crime insurance covers entity custody
The coverage amounts cited are public references from each custodian at time of writing. Policies evolve quarterly. The coverage applicable to a specific fund depends on the contracted service mix — available in the offering memorandum under NDA.
Three temperatures. One single logic.
Not all AUM moves the same way. We segment the treasury into three tiers — cold, warm and hot — so the bulk of capital is essentially immovable and only operational liquidity is in active risk.
Cold storage
85%+of AUMThe vast majority of capital. 3-of-5 multi-sig cold wallets with physical keys segregated in geographically distinct vaults (US, Switzerland, Asia). A cold operation requires human coordination in a scheduled window — it cannot move without IPS authorisation.
Warm wallet
10-15%of AUMRebalancing and allocation operations. 2-of-3 multi-sig via Fireblocks MPC with policy engine: per-counterparty, per-address, per-time-of-day and per-amount limits. Any transaction outside the limits requires manual upgrade with dual control.
Hot wallet
< 5%of AUMOperational liquidity for fees, gas and short-term trades. Whitelisted addresses, micro amounts, real-time on-chain monitoring with LOBO. If a hot wallet were compromised, damage is bounded by design — it is not a systemic failure point.
Five controls. None optional.
Documented key ceremony
Each key is generated under audited procedure: air-gapped environment, two operators, recorded video, registered hash. Documentation is held under legal custody with the fund's law firm. If anyone claims "we lost the keys", there is traceability to refute it.
Dual control on every operation
No transfer above $25,000 USD executes with a single signature. Minimum two people — GP + operational admin, or admin + custodian — authorise each operation. Without dual control, the transaction does not broadcast, regardless of the rank of whoever initiated it.
Dead-man-switch + succession
Documented procedure for GP incapacity or death. Keys do not vanish with a single person: there is a succession plan with the law firm and a designated trustee. For family offices investing generationally, this is non-negotiable.
24/7 on-chain monitoring with LOBO
LOBO watches every fund wallet in real time, alerts on anomalous flows, malicious smart contract approvals, exposure to counterparties with risk alerts and depegs. If something moves outside pattern, the team knows in minutes, not days.
Annual external audit
An independent auditor verifies annually: existence of assets (on-chain proof of reserves), match against reported NAV, operational controls, IPS compliance. The report is delivered to LPs without internal filters.
What happened with FTX. Why it cannot happen here.
FTX did not fail because of a hack: it failed because of commingling — client money was lent to Alameda Research, a related entity. Daleki Capital is structured, contractually and operationally, so that type of event is impossible. Here are the two columns.
- Fund capital in qualified custody, segregated per LP, direct beneficiary.
- 3-of-5 multi-sig with geographically segregated keys and documented key ceremony.
- Annual external audit + on-chain proof of reserves available to any LP on request.
- Written IPS with drawdown ceiling, exposure caps and dual control on every movement.
- Skin in the game: the GP invests in each fund under the same rules as the LP.
- No cross-lending between the fund and GP vehicles. Zero commingling.
- We do not use exchanges as custody. Only as execution rails.
- We do not issue our own token representing IOUs on fund assets.
- We do not fund adjacent activities (real estate, VC, other businesses) with fund capital.
- The fund balance sheet is readable on-chain at any time by LPs.
Custody mitigates counterparty risk. It does not mitigate market risk.
What this page describes — qualified custodians, multi-sig, dual control, external audit — protects against a specific class of risks: custodian hack, internal theft, operational fraud, operator failure, FTX-style scenarios. We cover that with institutional discipline.
What it does not cover — and we want to be explicit — is market risk. Bitcoin can fall 70%. Ethereum can fall 80%. A stablecoin can depeg. Regulation can change. Perfect custody of an asset that loses 70% of its value is still a 70% loss. Custody is the baseline: necessary but not sufficient.
Market risk is managed with the IPS, position sizing, drawdown ceilings and rebalancing discipline described in /thesis and /funds. The two systems work together: custody protects that the asset exists; the IPS protects how much exposure your portfolio carries.
Ask to see the setup. We show it in full.
During KYC we share custodian contracts, coverage certificates, audit attestation and, if requested, a call with our contact at the custodian. Custody is demonstrated, not promised.
Daleki Capital manages capital of qualified investors under private agreements exclusively. This is not a public offering of securities. Cryptocurrencies and digital assets are highly volatile. Past performance does not guarantee future results. All investments carry significant risk, including possible total loss of capital.