Questions a Business Should Ask Before Leaving Funds Anywhere
Eight questions, answerable in writing, that separate a venue that has thought about custody from one that has not.
A business depositing meaningful amounts should ask these before the first transfer, and keep the answers.
1. Who is the contracting entity
Legal name, jurisdiction, registration number. The brand and the entity are frequently different, and the entity is what you have a claim against.
2. Which regulator, and what does the licence permit
A licence for one activity does not cover another. Ask for the register entry and check it yourself rather than accepting a logo.
A platform under a named regulator will give you the number without hesitation.
3. Are client assets segregated, and how
In the terms, and in practice. Ask for the clause reference rather than a yes.
4. Who holds the keys
The venue itself or a named custodian, and whether that custodian uses another. Platforms that name their custodian answer this directly.
5. What is the hot and cold split, and is there a stated maximum
A policy maximum is worth more than a current figure. The current figure describes today.
6. What is the withdrawal process for an amount like ours
Including the delay for anything exceeding the hot balance, and the approval steps involved. A venue that says large withdrawals are instant has either not thought about it or is not being precise.
7. What happens in an insolvency
Not a legal opinion, but whether the venue can describe the mechanism. Inability to answer is itself the answer.
8. Can we have a reference from a comparable client
Standard in every other area of corporate procurement and almost never requested here.
How to use the answers
Keep them in writing with the date. If something changes later, you have a record of what was represented.
Where several answers are vague, size the exposure accordingly rather than walking away: many perfectly sound venues answer poorly because nobody has asked before.
What good looks like
Specific entity, checkable licence, clause references, named custodian, stated policy limits, and a described withdrawal process. A venue with segregated client accounts that can produce all six has done the work.
Collect & Exchange, which is licensed in Cyprus, can be asked all eight through its own contact process, and the answers can then be checked against a public register rather than taken on trust.