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Nexio uses centralized custody arrangements to hold and move BTC in support of its lending business. Nexio works with qualified custodians and controlled operational processes designed for institutional clients.

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Centralized Custody Model

Under this model, BTC is held with approved custodians in accounts or sub-accounts that support asset segregation, transaction controls, and institutional reporting. The goal is straightforward:
  • Keep client assets segregated
  • Prevent unauthorized movements of BTC
  • Support documented approval workflows
  • Reduce rehypothecation risk
  • Provide auditable records for lenders, borrowers, and counterparties In practice, this means Nexio coordinates with one or more regulated or otherwise approved custodians to manage deposit receipt, disbursement, repayment, and account reconciliation.

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How It Works

Nexio’s custody process typically follows four steps:
  1. Deposit and booking: Lender BTC is received into the appropriate custody arrangement and booked to the relevant lending facility.
  2. Segregation and controls: Assets are held under account structures and approval processes designed to keep exposures separated and movements controlled.
  3. Borrower funding: Once the relevant legal, credit, and operational requirements are satisfied, BTC is disbursed to the borrower through approved settlement instructions.
  4. Repayment and reconciliation: Coupon payments and principal repayments are received, matched to the facility, and reflected in Nexio’s reporting and oversight processes.

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Key Custody Controls

  • Qualified custody: Nexio can work with established custodians such as BitGo or other approved providers appropriate for institutional BTC settlement.
  • Asset segregation: Borrower and lender exposures are tracked through segregated account structures and internal controls rather than pooled informal balances.
  • Controlled movement of funds: BTC transfers are subject to documented approval, settlement, and reconciliation procedures.
  • Instruction verification: Funding and repayment instructions are checked against approved facility terms, counterparty records, and internal authorization workflows before BTC moves.
  • Role separation: Credit approval, operations, custody initiation, and reconciliation are separated across defined workflows so a single action does not control the entire transfer lifecycle.
  • Operational oversight: Custody activity is integrated with Nexio’s onboarding, compliance, and reporting processes.
  • Auditability: Nexio maintains records that support lender reporting, internal monitoring, and counterparty verification.

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Why This Matters

Custody is a core part of lender protection in Nexio’s model. Because Nexio facilitates undercollateralized and uncollateralized institutional credit, it is important that BTC funding and repayment occur through trusted operational infrastructure with clear controls, defined counterparties, and documented oversight. Strong custody does not eliminate credit risk, but it does reduce operational ambiguity and helps ensure that asset handling matches the legal and commercial structure of each facility.

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Example

Assume a lender allocates BTC to a borrower-specific facility on Nexio. The BTC is received into the relevant custody arrangement, recorded against that facility, and held subject to Nexio’s approval and settlement controls. Once the borrower satisfies the agreed funding conditions, BTC is released through the designated settlement workflow. During the life of the loan, coupon payments and final repayment are received through the same controlled framework, reconciled to the facility, and reflected in lender reporting.