Custodia Bank Achieves SOC 2 Type II Certification

Custodia Bank Achieves SOC 2 Type II Certification

Custodia Bank, a crypto-friendly bank based in Wyoming, has achieved a major milestone in its security controls by obtaining certification as a System and Organization Controls 2 (SOC 2) compliant bank.

On January 8, Custodia Bank announced that it had achieved the SOC 2 Type II certification, adding to its earlier milestone of completing the Type I audit. This certification demonstrates the bank’s commitment to data security and its focus on the highest security standards, as well as availability and confidentiality.

Understanding SOC 2 Certification

SOC 2 is a cybersecurity compliance framework developed by the American Institute of Certified Public Accountants. It provides an audit and report on an organization’s internal security controls, assessing a service provider’s capacity to safely store and process client data. This certification is particularly significant for technology companies.

Custodia Bank’s Milestone

Founded by Bitcoin advocate and investor Caitlin Long, Custodia Bank is a state-chartered bank focused on digital asset banking, payments, and custody solutions for U.S. commercial customers. According to Caitlin Long, “It is unusual for banks in the U.S. to obtain SOC 2 certifications, which Custodia has done, and only a small number of U.S. banks typically seek them.”

“But as the ‘gold standard’ for technology companies’ security controls, SOC 2 Type II certifications are critical for serving the most tech-forward clients. Custodia is proud to have obtained both the Type I and Type II certifications.”

Custodia Bank’s Regulatory Challenges

Custodia Bank has faced challenges in the banking space due to a complex regulatory environment. The bank sued the Federal Reserve in June 2022 over complaints related to its application for a master account with the Federal Reserve Bank of Kansas City. A master account allows banks direct access to the Federal Reserve, rather than going through an intermediary bank.

Custodia lost the initial lawsuit in March 2024 but has filed an appeal. The bank’s commitment to achieving the SOC 2 Type II certification demonstrates its dedication to the highest security standards and its focus on serving its clients.

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