Fidelity Digital Assets

Applying the SOC Framework to Digital Assets

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In the traditional financial services industry, common third-party service providers such as custodians, exchanges and fund administrators leverage SOC (System and Organization Controls) reports conducted by independent external auditors to build stakeholder trust and confidence. The interest in attaining SOC reports has been driven by the recognition that the reports disclose important information about third-party provider controls that end-users need to comprehensively assess and address the risks of outsourced core capabilities. The adoption of the SOC reporting standard by digital asset service providers speaks to the industry’s maturation and belief in providing stronger and more standardized assurances and transparency to stakeholders.

Independent audit firms (known as service auditors) perform SOC examinations on companies (service organizations) based on guidelines established by the American Institute of Certified Public Accountants (AICPA). SOC examinations are tests of internal controls and processes that impact an organization’s end users. AICPA’s SOC reporting framework presents three reporting options – SOC 1, SOC 2 and SOC 3. The types of services and systems a company offers along with user-specific needs informs the type and scope of audit an organization should obtain. 


To learn more about the differences between the main reports, and how these reports apply to digital asset service providers, download the full piece below.


Applying the SOC Framework to Digital Assets

 

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This content was created by Fidelity Digital Asset Services, LLC, a New York State-chartered, limited liability trust company (NMLS ID 1773897). All rights reserved.
Fidelity Digital Asset Services, LLC does not provide tax, legal, investment, or accounting advice. This material is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice. Tax laws and regulations are complex and subject to change. You should consult your own tax, legal, investment and accounting advisors before engaging in any transaction. Digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high risk tolerance. Investors in digital assets could lose the entire value of their investment.
Services are provided by Fidelity Digital Asset Services, LLC (NMLS ID 1773897).
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