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Small and medium-sized businesses (SMBs) and startups are increasingly engaging with digital assets for various purposes, such as payments, investments, and treasury management or more mainstream engagements such as non-fungible tokens (NFTs). While digital assets offer new opportunities, the complexities of the blockchain and cryptographic technologies also introduce a unique set of security and operational challenges that startups must navigate carefully to scale effectively.
The Importance of Secure Digital Asset Custody
Startups often lack dedicated resources to manage the complexities of digital asset security. This can make them more vulnerable to cyber threats, unauthorized access, and compliance risks. Secure digital asset custody solutions help business safeguard their assets while ensuring accessibility and operational efficiency. Without proper security measures, Startups risk losing funds due to hacking attempts, phishing scams, or internal mismanagement. Implementing a well-structured custody solution minimizes these risks and offers a foundation for growth in the digital asset economy.
In addition, regulatory scrutiny on digital assets is increasing, making it essential for Startups to comply with industry standards. By adopting a compliant custody solution, businesses can mitigate potential legal issues and foster trust among stakeholders.
Key Considerations for Startups in Digital Asset Management
As institutional interest in digital assets continues to surge, startups navigating this space must implement robust digital asset custody strategies to protect their holdings, maintain regulatory compliance, and ensure operational efficiency. Selecting the right crypto custody solution is not merely a technical decision—it is a foundational pillar for risk management, governance, and long-term business sustainability.
When evaluating digital asset or crypto custody solutions, startups should assess several critical factors.
Regulatory Compliance
Operating within a regulated custody framework is essential for mitigating legal exposure and establishing credibility with investors and counterparties. Jurisdictions worldwide impose varying degrees of oversight on digital asset custody, with some requiring custodians to hold trust licenses or comply with stringent capital and insurance requirements. Startups must proactively assess whether a custody provider meets jurisdictional regulations and maintains adherence to standards such as AML (Anti-Money Laundering), KYC (Know Your Customer), and FATF guidelines to avoid regulatory roadblocks.
Technical Expertise
The complexity of digital asset custody demands a deep understanding of cryptographic security, blockchain infrastructure, and key management protocols. A custodian with a proven track record of securing institutional funds can provide startups with the necessary tools to navigate the evolving threat landscape. The provider should demonstrate expertise in cold storage architecture, MPC (Multi-Party Computation), and secure enclave technologies, ensuring that client assets remain protected against both cyber and operational risks.
Shareholder Transparency
For startups seeking external investment or institutional partnerships, custody arrangements must align with best-in-class governance practices. Investors and board members expect full visibility into asset holdings, transaction histories, and security measures. A qualified custodian such as Rakkar offers auditable reporting, proof of assets reports, and real-time portfolio oversight, ensuring that shareholders have confidence in the company’s financial integrity and risk controls.
Funds Governance
Effective digital asset governance extends beyond security to include decision-making protocols, dispute-resolution mechanisms, and operational accountability. Startups must assess whether a custodian provides multi-signature authorization, programmable smart contract wallets, and tiered approval workflows to minimize single points of failure. The ability to establish predefined rules for asset transfers ensures that funds are not exposed to unauthorized withdrawals or mismanagement.
Security Measures
Institutional-grade security is paramount in safeguarding digital assets from external and internal threats. Key considerations include:
- Cold Storage vs. Hot Wallet Management – Balancing liquidity needs with security by leveraging a hybrid custody model.
- MPC-CMP & HSM Technology – Eliminating single points of compromise through advanced cryptographic techniques.
- 24/7 Monitoring & Threat Detection – Proactive risk management with anomaly detection and fraud transaction alerts.
Startups should prioritize custodians that implement these measures to mitigate risks associated with cyberattacks, insider threats, and operational failures.
Operational Efficiency
The right custody provider should streamline digital asset management processes, reducing administrative burdens while enhancing automation and reporting capabilities. Features such as API integrations and agile transaction processing can significantly improve liquidity management and compliance workflows. Startups should evaluate whether a custodian offers real-time portfolio tracking, customizable reporting tools, and scalable infrastructure to support business growth.
Multi-Asset Support
The digital asset landscape is evolving beyond cryptocurrencies, with increasing adoption of tokenized real-world assets (RWAs) such as stablecoins, digital bonds, and tokenized equities. A future-proof custody solution should support a broad range of assets while ensuring compliance with jurisdictional regulations. Startups that anticipate diversifying their treasury holdings should opt for a digital asset custodian with a flexible infrastructure capable of adapting to emerging asset classes.
Access & Governance Controls
Strong internal controls are critical to preventing fraud, ensuring compliance, and maintaining operational integrity. A robust crypto custody solution should provide:
- Role-Based Access Controls (RBAC) – Granular permission structures to restrict sensitive actions to authorized personnel.
- Approval Workflows – Multi-level transaction approvals to reduce operational risks and prevent unauthorized transfers.
- Audit Trails & Compliance Logs – Transparent record-keeping to ensure adherence to regulatory and internal governance standards.
By implementing these controls, startups can mitigate the risks associated with insider threats and operational mismanagement.
How Startups Can Enhance Their Digital Asset Strategy
By implementing a secure custody solution that fits the needs of the business and its respective stakeholders, Startups can confidently participate in the digital asset economy without compromising on security or compliance whilst enhancing stakeholder confidence and consumer trust. Understanding the fundamentals of digital asset management empowers businesses to make informed decisions and protect their holdings effectively.
Conclusion
Exploring the right digital asset custody options can help startups manage digital assets more efficiently while mitigating a myriad of risks. Learning about best practices and leveraging secure and compliant platforms are essential steps toward reducing operational backlog related to digital asset custody. Businesses should evaluate custody providers based on security protocols, regulatory adherence, and ease of use to ensure they select a solution that aligns with their operational needs.
Rakkar is qualified digital asset custodian backed by SCB 10X, the investment arm of Siam Commercial Bank, offering an institutional-grade solution designed to address the security and compliance challenges startups face in digital asset management. With fully segregated and insured custodial solutions, industry-leading transaction finalities, and highly customisable governance controls, Rakkar provides startups with streamlined asset and portfolio management so that Startups can focus on scaling efficiently.
Learn more about Rakkar’s Startup Packages can help startups secure and optimize their digital asset strategies.
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