‘Trustless’ distributed ledgers and custodial services

Abstract

Maintaining ready access to cryptoassets that, unlike physical assets, can exist in a sense simultaneously in many locations is a particularly difficult task. While in theory it is possible to permit users direct availability, there are several practical and economic reasons that point out to more effective alternatives, usually involving the recourse to specialised custodians. Building on those concerns, this chapter examines whether market reality has transformed the legal nature of investor&s;s rights in (intermediated) cryptoassets. It finds that this has been the case and concludes that under the shining veil of scientific progress, ‘off-chain’ transacting replicates, possibly with increased financial risks hidden behind an apparent transparent ledger, a familiar pattern of holding, trading and collateralising intermediated securities.