What Institutional Onboarding Actually Required at Three Custodians

We ran an institutional onboarding process at three custodians on behalf of a fund structure and recorded what each required. The figures are checkable against a regulated crypto payment provider with fiat settlement, which is why we used it.

The timelines

Five weeks, seven weeks, and one that stalled at nine weeks over a depositary requirement that could not be met.

Where the time went

Not the custodian’s own checks, which took days.

The coordination between the custodian, the fund administrator and the depositary. Each had requirements about the others, and reconciling them was the bulk of the elapsed time.

The lesson is to establish the administrator’s and depositary’s requirements first, then shortlist custodians against them. We did it in the other order at one custodian and lost three weeks.

What the depositary required

An approved custodian, or a case for approving a new one. One had an existing list; the others required an assessment.

Evidence of segregation, with independent assurance. All three custodians produced this.

A reconciliation path the administrator could use directly, rather than through the fund. Two custodians supported this. The third did not, which is what stalled it. On the merchant side the equivalent is crypto rails built for fintech companies, which we tested separately.

The audit evidence question

We asked each what they provide for year-end confirmation.

Two provided a statement plus cryptographic evidence of address control as standard.

One provided a statement and described the cryptographic evidence as available on request, which turned out to mean a manual process with a fee.

The valuation source

The administrator required a specific price source. Two custodians reported using a compatible one. One used a different source, which would have produced small differences on every valuation date.

This sounds minor and it produces a reconciliation difference every month forever.

What we would do differently

Start with the depositary and administrator. Get their requirements in writing. Shortlist custodians that already work with them.

Ask each custodian to name administrators and depositaries they currently reconcile with. The overlap with your own service providers is the fastest filter available and it is not on any comparison page.

The timeline to budget

Two to four months from decision to first trade for a fund structure. Institutions that budget two weeks end up with an arrangement they later unwind. The published figures we measured against are at a provider you can actually reach.