Earlier in 2020, Knox allowed the world’s first bitcoin exchange to be protected for the full value of their customers’ holdings. Now they are announcing the successful completion of a SOC 2 Type II audit, becoming the only custodian in Canada with SOC 2 Type II certification. This is a major milestone for Knox and the Canadian Bitcoin industry, historically tainted by catastrophic data breaches and loss of customers’ funds. Combined with the most comprehensive bitcoin insurance policy in both breadth of risk coverage and depth of limit capacity, Knox is further reinforcing its position as a leading risk management firm providing custodial services for investors, funds and enterprise clients.
“We have decided to complement our insurance with a SOC 2 Type II audit to continue to provide strong assurances of security and reliability around Knox to all market participants. Our aim is to advance security standards around bitcoin custodial services”, said Alex Daskalov, CEO at Knox Custody.
SOC 2 Type II Audit
SOC 2 Type II attestations are essential to show robust internal controls and security processes established within a company for both their design and implementation. As part of the examination, auditors collected internal documentation at Knox and performed thorough testing of the risk management framework, internal controls, data access, and security around critical custodial infrastructure.
Third-party certifications, such as SOC 2 Type II, which stands for System and Organization Controls (SOC), assess and subsequently test controls relating to the Trust Services Criteria — providing an added level of verification of the internal systems the audit covers. The review and audit included a thorough testing of the effectiveness of Knox’s custodial infrastructure, underlying database controls and physical security measures. Such verifications are essential in providing assurances to clients, which are complementary to Knox’s current insurance policy.
In traditional technology and financial services industries, SOC 2 reviews are the norm to demonstrate security assurances and regulatory compliance. Knox Custody’s goal is to provide responsible custodial services built on rigorous risk management principles to safeguard customers’ bitcoin holdings, and protect them with a comprehensive insurance policy. Knox has now achieved both milestones and in the company’s own words, is excited to be moving forward with a robust custodial service for enterprise, funds and investors looking to rely on a trusted partner.
“Paired with our comprehensive insurance policy bound by Marsh, the SOC 2 Type II certification is an excellent demonstration of our ability to deliver on the industry-beating internal controls we set for ourselves, our clients and our insurers”, said Christopher Banks, Financial Controller at Knox Custody.
The Future of Crypto Custody
As larger amounts of risk originate from custodial service providers, security standards will emerge and their correct execution will not only be important, but critical. Offering responsible products and services to sophisticated market participants, clients of custodians like Knox have rigorous vendor procurements to minimize their risk exposure. As the industry matures with more sophisticated participants, due diligence procedures will necessarily strengthen, and rightfully so. The successful completion of SOC 2 Type II is not only an acknowledgment of industry maturation, but a demonstration of the commitment of Knox towards advancing custodial risk management in the Bitcoin industry.
Source: Press relase Knox at Bitcoin Magazine
If you are interested in more news from the digital asset custody sector, such as the partnership between Riddle&Code and Coinfirm or the launch of Prosegur’s crypto custody solution, please feel free to visit our news section.