Where can a crypto company hold its treasury, and what can go wrong in each place?

Everyone you depend on

Wherever money sits, someone else is involved. The Bank for International Settlements (BIS) defines custody risk as the risk of losing assets held in custody because the custodian goes bust, is careless, commits fraud, runs things badly or keeps poor records.²

Concentration is the other half of the problem: holding a large share of the treasury in one asset, or with one bank, platform or protocol.^6,4 If that one place fails, a large share of the money is stuck at once.⁵

Banks

Bank deposits in the US are insured by the FDIC, but only up to $250,000 per depositor, per insured bank, for each account ownership category.¹ Deposit insurance does not cover crypto assets, and it does not cover the failure of a firm that is not an FDIC-insured bank.¹ Module 23 explains company deposits and the 2023 bank failures in detail.¹

Stablecoins

A stablecoin is only as good as the issuer and the reserves behind it, as Module 22 explains. In March 2023, Circle said it could not withdraw $3.3 billion of USDC's reserves, about 8% of the total, from the failed Silicon Valley Bank (SVB).⁵ A Federal Reserve staff note says USDC fell to 86 cents at its lowest.⁵

So a company that banked only at SVB and held only USDC would have been exposed to the same failure twice. On Sunday 12 March, the US Treasury, the Federal Reserve and the FDIC announced a backstop, and USDC fully recovered once Circle began processing redemptions on Monday 13 March.⁵

Exchanges and lending platforms

When you leave crypto with a platform, what you own depends on its terms. Celsius, a crypto platform, filed for bankruptcy in July 2022.³ In January 2023, the US bankruptcy court ruled that, under Celsius's terms of use and subject to defences it left open, crypto deposited in its "Earn" accounts had become Celsius's property, and so belonged to the bankruptcy estate.³ The terms had warned that, if Celsius went bankrupt, those assets "may not be recoverable".³

Those Earn accounts numbered about 600,000 and held crypto worth about $4.2 billion in July 2022.³ The ruling was about Celsius's own terms. Other platforms' terms differ, which is why the terms are worth reading before the money goes in.^3,2

Custodians and multisigs

A custodian is a firm that holds assets for others. Some treasuries spread their holdings across several. In June 2026, the Optimism Foundation said the Optimism Collective held about 19,300 ETH, split across several institutional custodians, a liquid staking position and one unstaked account.⁷ It proposed cutting to fewer custodians, to reduce overhead and simplify reporting.⁷ Optimism governance approved the plan in July 2026. The approved plan also lets the Foundation use covered calls and collars, which are options deals, on up to two-thirds of the ETH. The proposal says covered calls earn extra income but cap the gain if ETH rises.^8,7 Fewer providers can mean less work, but more depends on each one.^7,2

Many DAOs hold funds in multisig wallets, which need several signers to approve each payment, as Module 9 explains. For one ETH sale, ENS set up a separate Safe needing 3 signatures, from signers representing different parties, to keep that money apart from its other wallets.⁹

Tokenised Treasury funds

Some DAOs now hold tokenised funds that invest in US Treasury bills, which Module 16 covers. In mid-2024, Arbitrum DAO put $30 million into six products, mainly tokenised Treasury bill and money market funds, through its Stable Treasury Endowment Program (STEP).¹⁰ By August 2025, the Arbitrum Foundation said it had converted another 35 million ARB and placed the proceeds in three more products, and it published the addresses that held them.¹¹

Limits on any one place

ENS DAO's 2026 investment policy is a public example of written limits. These are one DAO's choices, not rules for everyone:⁴

• No more than 30% of the endowment in any single protocol.⁴
• No ETH placed with or through centralised exchanges.⁴
• Tokenised Treasury and money market funds capped at 5% of the endowment, from regulated issuers with published audits or attestations.⁴
• Stablecoins not tied to the US dollar capped at 5% of the stablecoin holdings.⁴