Custody Accounts

CUSTODY-US

Introduction

A Custody Account 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:

  1. Platforms that want to issue lightweight (in terms of KYC and features) deposit accounts.
  2. Platforms creating peer-to-peer (P2P) products.
  3. As a replacement of FBO accounts for Platforms that are not registered as an MSB - MSB - 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 MTL - MTL - 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.
  4. Platforms attempting crowdfunding.

Previous Steps

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:

Create Custody Account

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 Documentation

Name, Date of Birth, Address, Email (if unverified: 2FA), Phone Number (if unverified: 2FA).

Virtual Documents

Social Security Number (SSN) with W-9 Verification.

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 Businesses

Base Documentation

Business Name, Address, Entity Formation Date, Entity Type (e.g. LLC, Corp, etc.), Entity Scope (Industry), Business Email (if unverified: 2FA), Phone Number (if unverified: 2FA).

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.

Custody Accounts


CUSTODY-US

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