A legal and ethical structure obligating an individual or entity, acting as a fiduciary, to prioritize the best interests of another party, the beneficiary, above their own. This principle mandates duties of loyalty and care in managing assets or providing advice.
Mechanism
Within crypto investing, a fiduciary framework requires custodians, asset managers, or advisors to implement stringent security measures, maintain transparent operational practices, and act with prudence to safeguard client assets and optimize investment outcomes. This involves adherence to specific regulatory standards and reporting obligations.
Methodology
Institutions operating under a fiduciary framework must establish robust internal controls, conduct thorough due diligence on all counterparties, and ensure compliance with relevant regulations governing digital asset custody and trading. This provides a higher level of client protection and establishes trust within the institutional crypto space.
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