Summary of Custody Policy
INTRODUCTION
FalconX Limited (hereinafter, "Company", “we”, “us”, “our” or “FalconX”), incorporated in Malta is authorised as a Crypto-Asset Services Provider by the Malta Financial Services Authority (MFSA) pursuant to Regulation 2023/1114 on Markets in Crypto-Assets as implemented in Malta by the Markets in Crypto Assets Act (Chapter 647 of the Laws of Malta).
FalconX is also licensed as a Financial Institution by the MFSA pursuant to the Financial Institutions Act (Chapter 376, Laws of Malta) to provide payment services exclusively in relation to electronic money tokens (EMTs).
SCOPE
Pursuant to Article 75 (3) of Regulation (EU) 2023/114, FalconX Ltd (hereinafter referred to as the “Company”) maintains this summary of its Custody Policy.
The objective of the Company’s Custody Policy is to ensure the highest standards of security, compliance, and operational efficiency in managing and safeguarding crypto assets held in custody.
The Company’s Custody Policy was initially approved by the Board of Directors on November 11, 2025, and is reviewed annually unless earlier revision is necessitated by regulatory or business changes.
The Company’s Board of Directors is responsible for establishing, reviewing, and maintaining the Policy. Additionally, the Board appoints several senior officers to ensure the proper maintenance of the custody service offering to clients. These include the Head of Custody, who oversees the overall custody function; the Head of Security, who ensures the service aligns with internationally and nationally recognized best practices in ICT and cybersecurity; and the Heads of Risk, Compliance, Finance, and Internal Audit, who establish necessary controls to mitigate risks to clients and the Company. The General Manager is responsible for overseeing the general management of the Custody service.
The key components of the Policy are the following:
- Custody service is offered through FalconX Limited, an entity which is established in Malta and regulated by the Malta Financial Service Authority.
- Daily operations of the custody service outsourced to Warp Drive Inc., an entity forming part of the FalconX Group of companies.
- The Company adheres to all relevant regulations and industry standards, including Anti-Money Laundering and Know Your Customer requirements.
- Regular internal and external audits to ensure compliance and transparency are maintained.
- In addition, the Policy ensures detailed reporting mechanisms to regulatory bodies and clients.
- Custody wallets are automatically generated for clients to interact with. The clients interact with the custody function of FalconX through a FalconX User Interface, where they can conduct various transactions, including deposits, withdrawals, and configuring different rules and permissions.
- No FIAT currency held on behalf of the client.
- An internal management system maintained to control client level deposit address management, withdraw address management, and add/edit/delete customer addresses.
- Funds are stored in secure custody wallets. Additionally, the Company’s custody vault wallet is equivalent to a hot wallet.
- A robust ICT and cybersecurity system is implemented in line with internationally and nationally recognised best practices on ICT and cybersecurity.
- The Company utilizesmulti-factor authentication, MPC key management, rigorous approval process To ensure there is no single point of failure.
- A reconciliation process is adopted in respect of the custody service. Additionally, adequate and well-documented records/accounts are maintained.
- The Company keeps a register of positions, opened in the name of each client, corresponding to each client’s rights to the crypto-assets.
- Right of ownership
- Protection of client’s crypto assets
- The establishment of liability as a result of incidents
- Assets not subject to the rights of creditors
- No unauthorised use of clients’ assets
- Crypto assets belonging to the clients are held in dedicated, properly segregated and identified wallet addresses.
- Regular reporting to clients
The Custody Policy is designed to provide a robust framework for the secure and efficient management of digital assets. By adhering to stringent security measures, regulatory compliance, and exceptional client services, the Policy aims to build trust and confidence among clients while safeguarding their valuable assets.