“The right custody setup isn’t just about preventing hacks. It’s about building a structure that protects generational wealth while still giving you the flexibility to actually use your assets,” says Jake Claver, CEO of Digital Ascension Group. Families who built serious wealth in crypto face a security problem that traditional family offices haven’t had to solve at the same scale: there’s no centuries-old vault infrastructure to lean on. Banks, insurance, and custody norms for crypto are still being built.
The real cost of leaving assets on an exchange
Keeping millions on an exchange like Coinbase or Binance feels convenient until something goes wrong. Exchanges hold your private keys, which means you don’t actually control the underlying assets. When FTX collapsed, clients with eight-figure balances learned that lesson directly: bankruptcy proceedings move slowly, legal teams get paid first, and customers wait in line behind everyone else. Exchanges are built for trading, not long-term wealth preservation, and the risk calculus changes completely once you’re managing generational wealth rather than a trading position.
Multi-signature wallets as a first layer
Multi-sig setups require more than one private key to authorize a transaction, similar to requiring multiple signatures to move money out of a trust account. A 2-of-3 or 3-of-5 configuration spreads keys across different locations and people: one on a hardware device at home, one in a safe deposit box, one with a trusted advisor or family member. That structure protects against both external theft and internal risk, like a lost device or an incapacitated key holder.
Cold storage, insurance, and succession planning
Hardware wallets from providers like Ledger or Trezor keep keys offline, which is close to non-negotiable once holdings become substantial. But hardware alone isn’t a complete plan; you also need documented backup procedures and a succession plan that doesn’t leave heirs locked out. Standard homeowner’s insurance doesn’t cover crypto losses, so families need policies specifically designed for digital assets, sometimes backed by underwriters like Lloyd’s of London, with attention to what’s actually excluded in the fine print.
Moving to institutional-grade custody
Beyond DIY solutions, many family offices work with regulated custody providers, often federally chartered trust companies, that offer segregated accounts. That means client assets stay separate from the custodian’s own balance sheet, so if the custodian faces financial trouble, client holdings remain protected. These structures also solve succession: beneficiary designations work similarly to traditional brokerage accounts, letting assets transfer to heirs without requiring technical knowledge to recover private keys.
Digital Ascension Group has worked directly with families navigating this. One early client, who built a mining operation during Bitcoin’s early days, was keeping private keys in a desk drawer. DAG helped restructure the setup with LLC formation, institutional custody through partners like Anchorage Digital, and proper insurance coverage. If you’re managing substantial crypto holdings and want to talk through custody structures that fit your situation, you can reach the team at dag.com/contact-us.
Educational only, not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
