Balance becomes SOC 2 certified and starts serving NI 31-103 registered firms.
SOC 2 reports focus on the internal controls designed to meet service commitments and system requirements based on the security, availability, confidentiality, processing integrity, and privacy criteria established by the American Institute of Certified Public Accountants (AICPA). The Type I examination was concluded on May 31st and had in scope both the offline as well as the warm storage systems developed in-house by Balance over the past 5 years. The examination was conducted by Dansa D’Arata Soucia LLP (www.darata.com), a full service CPA firm based out of Buffalo, New York, which over the past decade has built a team of auditors specialized in understanding AICPA’s Trust Services Criteria and how to properly apply best practices to comply with this set of criteria in order to mitigate risk as it relates to information security.
The official auditors' report provides a thorough review of Balance's internal controls as well as policies and procedures for providing offline and warm digital asset custody services. The review also has in scope the company's processes relating to risk management and subservice organization (i.e, vendor) due diligence, as well as its entire IT infrastructure, software development life cycle, change management, logical security, network security, physical and environmental security, and computer operations. In completing this examination, Balance demonstrates adherence to one of the most stringent, industry-accepted compliance frameworks for service organizations and provides additional assurance to its clients, through an independent auditor, that its custody infrastructure, business processes, and information technology and risk management controls are properly designed.
Balance is the only digital asset Canadian custodian with both its offline and warm storage systems SOC 2 certified which can fulfill the stringent diligence requirements of NI 31-103 registered entities and individuals such as investment dealers, mutual fund dealers, and portfolio and investment fund managers. As per the General prudent custodial practices section in the companion policy to the national instrument (i.e., 31-103CP):
"Assets other than cash and securities (n.b., digital assets)
We recognize that in limited cases, it may not be feasible to hold certain asset types at a qualified custodian. For example, bullion requires a custodian that is experienced in providing bullion storage and custodial services, and is familiar with the requirements relating to the physical handling and storage of bullion. Such a custodian may not meet the definition of a "qualified custodian". In those cases, we expect a registered firm that would otherwise be subject to subsection 14.5.2(2), (3) or (4), had the client assets or investment fund assets been cash or securities, to exercise due skill, care and diligence in the selection and appointment (where applicable) of the custodian. This can involve the registered firm reviewing the facilities, procedures, records, insurance coverage, and creditworthiness of the selected custodian."
George Bordianu, the company’s Chief Executive Officer notes:
"Our SOC 2 report demonstrates we have the appropriate controls in place to mitigate risks related to the custody services we provide to our customers. Combined with our insurance program with the best asset coverage ratio in the industry, we have what we need to start serving NI 31-103 registered entities and individuals. We welcome all such interested parties to contact us and start performing their diligence."
Balance successfully serves crypto exchanges, OTC and prop. trading desks, neobanks, ATM networks, private funds, market makers, liquidity providers, foundation treasuries and now NI 31-103 regulated entities and individuals. To find out more, visit www.balance.ca.
PARADISO VENTURES INC. O/A Balance is a private company incorporated under the Canada Business Corporations Act, R.S.C., 1985, c. C-44 with its registered office address at 888 3rd St SW, Bankers Hall West Tower, 10th floor (Attn: Balance), Calgary, Alberta, T2P 5C5, Canada which sells digital goods and services. Balance is registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as a money services business dealing in virtual currencies with registration number M20210422 and with the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) as a money services business with registration number 31000258737080. This is not an offer or solicitation of any investment contract or financial security and should not be misconstrued as such. Digital assets and the blockchain are early technologies and as such have an associated high degree of risk. Balance does not provide financial, investment, tax, legal, or any other type of professional advice. For informational purposes only.