Jackson Zeng

November 10, 2022  ·  2 Mins

Caleb & Brown's Approach to Risk Management and Client Protection

Caleb & Brown's Approach to Risk Management and Client Protection

Updated June 3, 2023

While the market fallout is unfolding around the FTX insolvency, the industry is searching for safety and stability. Having been a bitcoiner since 2013, I have witnessed a wide range of shocks to the industry, including hacks, insolvencies, instances of fraud, and outright collapses.

That experience informs me that there will be further fallout and contagion spread as exposed counterparties are revealed over the coming days. Be particularly cautious regarding all lending platforms, as the business activity inherently involves counterparty exposure.

If you are confident with your operational security, now is the time to practise self-custody. If you need assistance, you have Caleb & Brown for that.

I want to communicate our position at Caleb & Brown as clearly and succinctly as possible. There is one singular priority at Caleb & Brown that reigns above all others: Protection of client balances.

This means:

Client balances are held on a 1:1 basis
  • Denominated in each respective asset
  • Client balances are not traded
Client balances are backed by 100% full reserves
  • Assets in Caleb & Brown's direct, on-chain custody remain at 100% of total liabilities
  • Caleb & Brown is never susceptible to running out of funds for withdrawals
  • Reserves are held in cold storage
Cold storage details
  • Industry leading custody technology is used for all supported assets, with our partner Fireblocks
  • Unsupported assets (minority) are secured by Caleb & Brown's cold storage, which has experienced no hacks since our company's inception
  • Capital in hot wallets and exchanges for trading execution are funded by Caleb & Brown's operating capital
No other use of client funds
  • Client balances are not traded without client direction
  • Client balances are not lent out
  • Client balances are not used as collateral
  • Client balances are not staked
Financial Audits Underway
  • Caleb & Brown has engaged an auditor to produce financial audits annually

Our focus has always been on client protection and risk management. This was the case upon our founding, and will remain for the decades to come.

Jackson Zeng CEO

Disclaimer: This assessment does not consider your personal circumstances, and should not be construed as financial, legal or investment advice. These thoughts are ours only and should only be taken as educational by the reader. Under no circumstances do we make recommendation or assurance towards the views expressed in the blog-post. The Company disclaims all duties and liabilities, including liability for negligence, for any loss or damage which is suffered or incurred by any person acting on any information provided.

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