Introduction
A Custody Account <<account_custodyUS>> allows a Platform to issue accounts on behalf of users, where funds are held by a third party trustee. Custody accounts are FDIC insured up to $250,000.
Common Use Cases
Custody Accounts are commonly used for:
- Platforms that want to issue lightweight (in terms of KYC and features) deposit accounts.
- Platforms creating peer-to-peer (P2P) products.
- As a replacement of FBO accounts for Platforms that are not registered as an MSBMSB - A money services business (MSB) is a legal term used by financial regulators to describe businesses that transmit or convert money. Businesses that transmit money or representatives of money, provide foreign currency exchange, cash checks, or are in the some other way in the flow of funds are usually considered MSBs Please, consult with your attorney if your services fall under this definition. Synapse and its partner banks may require a legal opinion letter from your counsels to attest that your Platform does not need MSB registration or Money Transmitter States Licenses to operate. For more information, please refer to https://www.fincen.gov/money-services-business-definition Last updated July 2019 (or MTLMTL - Money Transmitter License in some cases) and must stay outside the flow of funds, but that still want to be part of a money transmission process.
- Platforms attempting crowdfunding.
Previous Steps
- Create user with KYC (recommended).
or - If user has been created already, then add required KYC.
Recommend User Creation and KYC Submission Flow
Please look at our KYC Overview for our suggested user creation and KYC addition process. Not following this process can lead to bad user experience and unnecessary efforts by the platform.
Create Account API Call:
Next Steps:
Once the Custody Account has been opened and verified, please make sure to look at our Transfers page.
KYC Requirements
Custody accounts have more light-weight KYC requirements than deposit accounts. Please note, KYC requirements will differ between individuals and business users, and might further vary depending on the use case and the nature of the user.
Minimum KYC for Individuals
Minimum KYC for Individuals | |
|---|---|
Base Documentationââ | Name, Date of Birth, Address, Email (if unverified: 2FA), Phone Number (if unverified: 2FA). |
Virtual Documents | Social Security Number ( |
Minimum KYC Requirements for Businesses
To open a business custody account, you must supply the KYC of the table below as well as submitting a UBO form.
Minimum KYC for Beneficial Owners
We might require KYC from business beneficial owners (an individual owning 25% or more of the entity) depending on the use case.
For more information on the specific documents allowed for each KYC category and our verification process please refer to KYC Documentation and Verification.
Sub-Resources
Custody Account APIs
Legal Disclosures
Please make sure to check our General Legal and our Accounts Legal page.
Updated about a year ago