Crypto custodian Anchorage announced that it has passed a prestigious SOC 1 audit from the American Institute of Certified Public Accountants.
The SOC 1 Type 1 audit Anchorage secured was performed by big four auditing firm Ernst & Young. The credential requires a rigorous examination of the internal systems and controls supporting the firm’s financial reporting.
“Successfully completing this examination and being granted the SOC 1 Type 1 report more formally signifies something we have long known: the controls and processes Anchorage has developed are world class, and meet a truly rigorous standard,” said Jennifer Lee, Anchorage’s head of compliance. “What sets the Anchorage report apart is a heavy emphasis on our ability to prove exclusive control, confidentiality, and availability of private keys—an area unique to crypto overall, and one where solutions that rely on physical security, redundancy, and manual human operations have been known to struggle.”
The SOC 1 Type 1 audit is a snapshot of a firm’s financial reporting. Anchorage is also working towards earning and maintaining a SOC 1 Type 2 audit, which looks at financial reporting over a period of at least six months.
“As the digital asset space matures, more and more institutions expect the kind of formal assessment that the SOC 1 Type 1 report represents,” said Diogo Monica, President and Co-Founder of Anchorage, in a statement.
Anchorage joins Coinbase Custody and Gemini Trust, which have both reported having SOC 1 Type 1 and 2 audits. They also have SOC 2 audits, which focus on securing and protecting customer data.
In July, Anchorage announced a partnership with crypto-lender Silvergate Bank. That allowed Anchorage’s custody clients to use their cryptocurrency holdings as collateral for loans without taking it out of secure storage.
In September, Anchorage announced it will provide the same custody partnership for the ROSE utility token of DeFi’s Oasis Network.
That secure custody of capital is particularly important given the security risks of the rapidly growing decentralized finance (DeFi) space, which accounted for half of all crypto hacks and thefts in 2020, according to CipherTrace.