Custody compliance refers to the processes and regulations that ensure the safe storage and management of cryptocurrencies on behalf of clients. This involves adhering to laws and standards set by financial authorities, aimed at protecting investor assets and preventing fraud.Key components of custody compliance include regular audits, secure storage solutions, and robust risk management practices. Institutions that offer custodian services must implement strong cybersecurity measures to guard against hacks and unauthorized access. Moreover, these services often require precise record-keeping of transactions and asset holdings to ensure transparency. Compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations is also crucial to verify the identities of clients and mitigate risks associated with illicit activities.Ultimately, custody compliance builds trust between clients and custodians, ensuring that assets are managed responsibly and in accordance with legal requirements, thereby fostering a safer environment for investing in cryptocurrencies.