Digital Security Multi Custodian Policy
WisdomTree have appointed multiple custodians to safeguard the digital currency held by WisdomTree Issuer X Limited on behalf of investors.
The digital currency will be stored across multiple custodians. We spread assets across multiple custodians because of these key factors:
- Diversification of assets to mitigate any single point of loss of assets.
- Ability to take advantage of any one custodian strength and expertise in a particular digital currency.
- Ability to take advantage of any one custodian’s enhanced operational efficiency due to development within that custodian.
- Ability to utilise new or increased security measures and tools developed by any one custodian.
- Ability to continue to improve cost efficiency of the products eg. Custody or transaction fees.
Allocation procedure:
- WisdomTree UK Limited will process any creations and redemptions through one custodian interface, to avoid multiple layers of processes for the AP(s). This eliminates risk and inefficient procedures.
- WisdomTree UK Limited will, on a quarterly basis review the assets across the custodians take into account the relevant factors, such as these listed below and determine what the appropriate level of assets should be at each custodian at the rebalance date which will be scheduled each month end.
- There will be no set allocation ratio as circumstances can change and may require movement of assets across the custodians.
- WisdomTree UK Limited will take into the account the below factors in determining the allocation levels for each custodian. Please note the below is not an exhaustive list and will be reviewed periodically.
Factors considered:
Factors |
Criteria Reviewed |
Operationally Efficiency |
How efficiently a custodian operates with regard to processing creation, redemptions and onboarding of new Authorised Participants.
|
Technology and Infrastructure Security |
A custodian with the most advanced technology and constantly improving systems to enhance security is likely to have higher allocation in their custody than custodian that with dates systems.
|
Insurance |
A custodian with zero to lower level insurance for theft or loss of digital currency is likely to have lower level of digital currency allocation.
|
Compliance & Regulatory |
A change in the regulatory & compliance landscape may effect where certain currencies can be allocated. |
Cost efficiency |
A custodian with an efficient fee model and is combined with all of the above factors is likely to have higher level of digital currency allocated. |
Market Events |
An announcement of a fork or new currency not accommodated by any one custodian. |