Crypto-Friendly Custodia Bank Secures SOC 2 Type II Certification

Custodia Bank, a Wyoming-based institution specializing in crypto-friendly banking solutions, has achieved a significant milestone in cybersecurity by obtaining the System and Organization Controls 2 (SOC 2) Type II certification.

The announcement on Jan. 8 marks a progression from the bank’s earlier achievement of completing the SOC 2 Type I audit. This certification highlights Custodia's robust internal security controls, further establishing its credibility in securely handling client data.

What is SOC 2 Compliance?

SOC 2, developed by the American Institute of Certified Public Accountants (AICPA), is a stringent cybersecurity framework designed to evaluate an organization’s ability to securely store and process sensitive information. The Type II certification, in particular, assesses an institution’s operational effectiveness over time, focusing on critical areas such as security, availability, and confidentiality.

Custodia Bank: Leading the Way in Digital Asset Banking

Founded by Bitcoin advocate and investor Caitlin Long, Custodia Bank is a state-chartered financial institution dedicated to digital asset banking, payment services, and custody solutions for U.S. commercial clients. The bank’s latest achievement reflects its unwavering commitment to maintaining the highest security standards, despite operating in a challenging regulatory landscape.

In its announcement, Custodia emphasized that the SOC 2 Type II certification underscores its focus on safeguarding client data and ensuring operational resilience.

Regulatory Challenges and Legal Battles

Custodia Bank has faced significant hurdles in its pursuit of innovation in the banking sector. In June 2022, the bank filed a lawsuit against the Federal Reserve, challenging the delays in its application for a master account with the Federal Reserve Bank of Kansas City. A master account would grant Custodia direct access to the Federal Reserve’s financial system, bypassing intermediary banks.

While Custodia lost the initial lawsuit in March 2024, the bank has filed an appeal, demonstrating its persistence in seeking fair access to the Federal Reserve’s resources.

A Milestone for Crypto-Friendly Banking

The SOC 2 Type II certification reinforces Custodia Bank’s position as a leader in secure and compliant digital asset banking. By meeting rigorous security standards, the bank aims to instill greater confidence in its customers and the broader crypto community, setting a benchmark for innovation and security in the evolving financial landscape.

Stay tuned for further developments as Custodia Bank continues to navigate the intersection of traditional finance and cryptocurrency.