DeFi Custodian Trustology Gets Green Light From UK’s FCA

The march toward institution-friendly DeFi continues.

AccessTimeIconOct 5, 2021 at 2:30 p.m. UTC
Updated Oct 5, 2021 at 2:56 p.m. UTC

Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

Cryptocurrency custodian Trustology has been granted a full registration by the Financial Conduct Authority (FCA), one of a handful of firms to have been upgraded from the U.K. regulator’s temporary registration list.

In addition to the gamut of anti-money laundering (AML) checks, the FCA grilled Trustology about the custody firm’s speciality in decentralized finance (DeFi), said CEO Alex Batlin.

“The engagement was really good when we started talking about what we do for DeFi,” said Batlin. “They were very open, listened a lot and asked questions in order to understand how we do AML checks around DeFi.”

Getting DeFi institution-ready with added AML and know-your-customer (KYC) checks is now the focus of a number of firms, with solutions ranging from Aave whitelists to decentralized identity plays and even hardware security modules.

Trustology created a “DeFi Firewall” approach, by which a set of rules in a smart contract can block certain transactions and allow others; swaps on Uniswap might be allowed, while more exotic and less battle-tested platforms would be ruled out. Trustology is adding more features for 2022, such as a transaction decoder, said Batlin.

“If someone has compromised a website where you use a dapp, if it’s been hacked, instead of sending something to Uniswap you could just be forwarding funds to a thief,” he said, adding:

“So we decode the transaction you are about to sign, and then we look it up in our registry, and instead of a load of binary, we give you a text saying, ‘You are about to do a swap of ETH for DAI on Uniswap,’ for example.”


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

CoinDesk - Unknown

Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC