Facilitating Secure Crypto Transactions with Our Insured Escrow Service

2023-02-16  •  4 min read

Escrow, in its broadest sense, is a service provided by a third party to hold funds or assets temporarily in order to facilitate a transaction between a buyer and seller. This third party is contracted to safekeep the amount entrusted until the promised obligation agreed upon between both parties has been met, after which point the escrow service provider will release the assets.  

While a smart contract can be created to act as an escrow service, thereby automatically releasing the assets once payment conditions have been fulfilled, choosing a regulated institution to oversee the transaction provides more protection for the assets involved.

How Ceffu’s escrow service works

Backed by our insured institutional-grade cold storage solution, Qualified Wallet, our independent third-party escrow service facilitates and executes bespoke transaction terms agreed to by the two parties to fit their needs. There are several use cases to engage our crypto escrow service:

Over-the-counter (OTC) transactions

As a classic example of peer-to-peer (P2P) transactions, company B (the seller) will first deposit assets in Ceffu’s escrow account. Once company A (the buyer) proceeds with transferring the agreed upon amount to company B, and confirmation of receipt from company B has been made, Ceffu will release the assets in escrow to company A.

Merchant funding or acquisition

Company (A) investing in or acquiring another company (B) may choose to progressively pay parts of the total agreed upon amount via an escrow agreement, wherein the assets are to be transferred to company B only when company B reaches specific milestones. In this instance, company A (the investor or acquirer) will first deposit the full amount in escrow. Once company B (the investee or acquiree) reaches one of those milestones, both parties will contact our designated Ceffu account manager to confirm and co-instruct the segmented amount in escrow to be released. 

Securing treasury

Many growing crypto projects may choose our escrow service to allocate their treasury to a segregated cold wallet on Ceffu wherein the tokens will remain for a defined period of time. Once this period ends, a release schedule will be in place to progressively distribute the assets in escrow to the project’s community. Given the cold wallet’s on-chain nature, backers of the project have full confidence that the tokens are kept secure and released as scheduled. 

Private fundraising

Projects receiving a private round of fundraising from a number of investors may choose to safeguard their tokens in a Ceffu escrow account and release them to those investors according to an agreed upon release schedule. 

Why choose Ceffu as your escrow service provider

Segregated on-chain wallet

Each Qualified Wallet used in escrow provides clients with their own segregated on-chain wallet address, which contains only their own assets. This proof can be verified directly on the blockchain, giving clients and their community full visibility that the only movements in and out of the wallet belong to the client.

Multi-party computation (MPC)

Our Qualified Wallets run on MPC technology, private key shares can communicate secure information without revealing any of the actual information – there is no single point of failure. In case of a security breach of one of the key shares, your account security remains intact. This is reinforced by storing key shares on air-gapped FIPS 140-2 devices, which are distributed across different geographical regions.

Cold storage insurance and disaster recovery

Unlike a smart contract, which offers no protection against loss of assets, our solutions are backed by insurance and have disaster recovery plans in place, providing confidence and reassurance that the assets in escrow are well protected. Our solutions are also periodically audited, having already obtained the ISO 27001 and 27701 certifications, SOC 2 Type 1 and SOC 2 Type 2 attestations, and undergo numerous security examinations.

Trust is the core foundation of any transaction taking place between individuals or businesses. Engaging an independent third party to facilitate such transactions provides an added layer of security and peace of mind, ensuring that all parties involved are held accountable to the terms of the contract.

Contact us to find out how Ceffu can secure your escrow transaction by filling out our institutional form here.

About Ceffu

Ceffu is a compliant, institutional-grade custody platform offering custody and liquidity solutions that are ISO 27001 & 27701 certified and SOC Type 1 & Type 2 attested. Its multi-party computation (MPC) technology, combined with a customizable multi-approval scheme, provides bespoke solutions allowing institutional clients to safely store and manage their digital assets through its insured, segregated cold storage solution, Qualified Wallet. Institutions also benefit from Ceffu’s secure gateway to a wide range of liquidity products within the Binance ecosystem as Binance’s institutional custody partner.

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