Banking for Crypto Custody and Wallet Providers

Licensed Custody Meets the Least Bank Resistance in Crypto

In our experience across the partner network, licensed custody providers face the least bank resistance of any crypto profile. The reason is structural: custody is passive balance management with minimal payment velocity, no chargeback exposure, and a clear regulatory perimeter. A bank looking at a custodian is reading an operational-risk profile it recognises, not a payments profile it does not.

The corollary matters commercially: a custodian that also runs an exchange, a lending book, or an on-ramp loses that advantage, because the bank now underwrites the riskiest activity in the entity rather than the safest. Separating custody into its own licensed vehicle is a banking decision as much as a regulatory one.

Client Assets Are Not the Custodian’s Assets

MiCA Article 70 requires a crypto-asset service provider holding client funds other than e-money tokens to place them with a credit institution or a central bank by the end of the business day following receipt, in an account separately identifiable from those holding the firm’s own funds; the rule does not apply to a provider that is itself a credit institution, e-money institution, or payment institution.^[1] For a custodian, the fiat leg of that requirement is usually small but the principle governs the whole relationship.

On the crypto leg, MiCA Article 75 requires a custodian to keep a register of positions in each client’s name, to hold clients’ crypto-assets on the distributed ledger separately from its own, and to keep them legally segregated from its estate so that its creditors have no recourse to them, in particular in insolvency.^[1] In practice the segregation question is about wallet architecture rather than bank accounts: which keys control which balances, whether client assets are pooled or individually addressed, and whether the custodian can reconstruct per-client entitlement from on-chain state plus its own ledger. Banks ask about this because a custodian that cannot answer it is a custodian whose insolvency would be unresolvable.

Banks Test a Custody File Mainly as Operational Risk

Key management and storage split. Documented segmentation across hot, warm, and cold storage, with multi-party computation or multi-signature arrangements, ceremony procedures, and geographic distribution of key material. This is read as operational risk: the question behind it is whether a single compromise or a single departing employee can move client assets.

Insurance. Specie cover for cold storage and crime cover for hot wallets, with the policy limits set against actual assets under custody rather than a headline figure. Banks ask for the schedule, not the certificate. The exposure behind it is real: under MiCA Article 75 a custodian is liable to its clients for losses from incidents attributable to it, capped at the market value of the lost crypto-assets when the loss occurred.^[1]

Proof of reserves and attestation. Where the custodian publishes one, banks ask about methodology and cadence. An attestation that proves assets exist without proving liabilities is read as partial, and saying so plainly is better received than presenting it as complete.

Analytics and screening. A live contract with an institutional-grade blockchain analytics provider, configured. The amended EBA money-laundering risk-factor guidelines, EBA/GL/2024/01, expect a crypto-asset service provider to have transaction monitoring and advanced analytics tools in place and to apply them on a risk-sensitive basis,^[2] and the New York State Department of Financial Services told New York banking organisations engaged in virtual-currency activity on 17 September 2025 to consider blockchain analytics, noting their growing exposure through customers.^[3]

Four Account Layers, and Only the Client-Fiat Layer Is Slow

Costs sit at the low end of the crypto range because payment velocity is low: operating EMI maintenance of €100 to €500 a month is typical, and card acquiring is usually not required at all. Ranges are indicative across the partner network as of June 2026.

How Jagelski & Partners Helps

Custody is usually the most straightforward crypto profile to bank, and the assessment reflects that: it confirms the regulatory perimeter, checks whether other activities in the same entity will drag the underwriting toward a riskier profile, and identifies the independent specialist who places the operating and client-fiat layers against institutions whose appetite already admits licensed custodians.

Where a custodian intends to add exchange, lending, or on-ramp activity later, we say at the assessment stage what that will do to the banking relationship, because the cheapest time to structure it into a separate vehicle is before the accounts are opened.

Frequently Asked Questions

References