Digital A sset Custody and Private International L aw Control , Property and Cross -Border Coordination
EDITORIAL BOARD Miguel Ángel Collado Yurrita Joan Egea Fernández Isabel Fernández Torres José Ignacio García Ninet Javier López García de la Serrana Belén Noguera de la Muela Luis Prieto Sanchís Francisco Ramos Méndez Ricardo Robles Planas Sixto Sánchez Lorenzo Jesús-María Silva Sánchez Joan Manuel Trayter Jiménez Juan José Trigás Rodríguez Director of Publications
Digital A sset Custody and Private International L aw Control, Property and Cross-Border Coordination Cayetana Santaolalla Montoya
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This book has undergone a rigorous peer-review process.
© 2026 Cayetana Santaolalla Montoya Cayetana Santaolalla Montoya has asserted her right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this work. © 2026 Atelier Santa Dorotea 8, 08004 Barcelona e-mail: editorial@ateliereditorial.com https://atelieropenaccess.com/ Tel.: 93 295 45 61 I.S.B.N.: 979-13-88510-05-2 Depósito legal: B 20894-2026 Diseño y composición: Addenda, Pau Claris 92, 08010 Barcelona www.addenda.es Impresión: Winihard
Contents List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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List of Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Author’s Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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General Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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PART I FOUNDATIONS: THE ASSET AND THE RELATIONSHIP Chapter 1. Digital Assets as Objects of Private Law . . . . . . . . . . . . . . . . Introduction: The Classification Problem and Why It Cannot Be Avoided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. The Concept of Digital Assets: Definition, Scope and the Functional Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. The Taxonomy That Matters for Private Law: Native Assets, Tokenised Rights and the Space Between . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Digital Assets and the Law of Property: An Architecture Built for Another World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V. Control as the Functional Substitute for Possession: Concept, Limits and Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI. Digital Assets in Comparative Case Law . . . . . . . . . . . . . . . . . . . . . . . . . . .
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I.
Chapter 2. Custody, Control and Private Law Classification . . . . . . . . I.
Introduction: Why Custody Is the Central Private Law Problem of Digital Asset Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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27 29 33 37 46 51 59 59
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II. What Is Digital Asset Custody? A Private Law Definition . . . . . . . . . . . . . . III. Custodial Models: Architecture, Legal Consequences and Risk Profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Who Provides Digital Asset Custody? Exchanges, Banks and Specialist Custodians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V. Digital Vaults and Key Management: Technical Infrastructure and Legal Characterisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI. The Private Law Classification of Digital Asset Custody: Deposit, Mandate, Fiduciary Relationship or Regulated Service? . . . . . . . . . . . . . . . . VII. The DeFi Governance Gap: Private Law Without a Custodian . . . . . . . . . . VIII. Custody as a Legal Relationship, Not a Technical Arrangement . . . . . . . . .
59 64 67 72 75 82 90
PART II THE CUSTODIAL RELATIONSHIP AND ITS LIFECYCLE Chapter 3. The Custodian’s Duties and Liability . . . . . . . . . . . . . . . . . . .
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I. Introduction: Duties as the Private Law Content of Custody . . . . . . . . . . . II. The Duty of Safekeeping: From Vault to Code . . . . . . . . . . . . . . . . . . . . . . III. Segregation: The Institutional Linchpin of Custodial Client Protection . . . . IV. The Duty of Restitution: Return on Demand and Its Limits . . . . . . . . . . . V. Prohibition on Rehypothecation and the Use of Client Assets . . . . . . . . . . VI. Cybersecurity and Operational Resilience as Legal Obligations . . . . . . . . . VII. The Duty of Information and the Accountability Framework . . . . . . . . . . . VIII. Liability: Standard of Care, Burden of Proof and Comparative Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX. Automated Custody: Smart Contracts, Oracles and the Attribution of Automated Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X. The Integrated Architecture of Custodial Duty and Liability . . . . . . . . . . .
95 96 99 102 104 108 110 112 119 125
Chapter 4. Insolvency of Digital Asset Custodians . . . . . . . . . . . . . . . . .
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I. Introduction: Why Insolvency Is the Stress Test of Custody Law . . . . . . . . II. The Core Question: Client Asset or Estate Asset? . . . . . . . . . . . . . . . . . . . . III. Segregation in Insolvency: Protection, Failure and Proportional Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Trust, Fiduciary and Civilian Approaches to Custodial Insolvency Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V. The Landmark Cases: Celsius, FTX, Cryptopia, Mt. Gox and BitGrail . . . . VI. Cross-Border Insolvency Dimensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII. Reform: Towards an Adequate Insolvency Framework for Digital Asset Custodians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII. Contract and Segregation as Proprietary Fate . . . . . . . . . . . . . . . . . . . . . . .
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Chapter 5. Digital Succession and Custodian Duties . . . . . . . . . . . . . . . .
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I. II.
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Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Succession Problem: Scale, Legal Structure and the Custodian’s Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. The Custodian’s Obligation: A Model Post-Mortem Access Clause . . . . . . . IV. Private International Law of Digital Succession . . . . . . . . . . . . . . . . . . . . . V. Data Protection, Confidentiality and the Custody Relationship . . . . . . . . . . VI. CBDCs and State Custody: Disintermediation, Succession and Constitutional Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
156 161 164 168 172
PART III COORDINATION ACROSS BORDERS Chapter 6. Cross-Border Digital Asset Custody and Private International Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction: The Private International Law Problem of Digital Asset Custody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. The Failure of Lex Situs: Structural, Not Technical . . . . . . . . . . . . . . . . . . III. The Three Distinct Conflict-of-Laws Questions in Digital Asset Custody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Comparative Connecting Factors: A Critical Survey of Seven Jurisdictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V. Unidroit Principle 5: The Waterfall Architecture and Its Evaluation . . . . . VI. The Functional Connecting Factor: The Effective Locus of Control over Key Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII. Jurisdiction, Enforcement and the Persons Unknown Problem . . . . . . . . . . VIII. Custody Chains, Sub-Custodians and Transnational Layered Risk . . . . . . . . IX. Beyond Lex Situs: Findings and the Case for Reform . . . . . . . . . . . . . . . .
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Chapter 7. Cross-Border Digital Asset Custody: A Competition-Sensitive Conflicts Framework . . . . . . . . . . . . . . . . . . . . . I. II.
Introduction: The Structural Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Structure of the Digital Asset Custody Market and the Role of PIL Fragmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. MiCA’s Custody Framework: Achievements, Structural Gaps, and Competitive Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. PIL and Competition Law in Digital Asset Custody: The Three Dimensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V. The Competition-Sensitive Conflicts Framework: The Fully Elaborated Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI. CBDCs and the State as Custodian: Competitive Neutrality Imperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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177 178 182 186 193 195 206 209 213
215 215 216 220 222 226 233
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Chapter 8. Towards a Transnational Private Law of Digital Asset Custody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. Introduction: The Constructive Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. Theoretical Framework: Functional Coordination Without Uniformity . . . . III. Ten Principles for a Transnational Private Law of Digital Asset Custody . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. The Institutional Architecture for Implementation . . . . . . . . . . . . . . . . . . . . . V. The Horizon: AI, Quantum Cryptography, CBDCs and the Next Generation of Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
237 237 238 241 256 263
General Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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The Argument in Synthesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Three Structural Transformations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What the Ten Principles Achieve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Institutional Pathway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Research Agenda That Remains Open . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Closing Argument: Why Private Law Matters More Than Regulation . . . . .
267 267 268 269 269 270 271
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Books and Edited Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Book Chapters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Journal Articles and Working Papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table of Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legislation and Regulatory Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . International Instruments and Soft Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Institutional Reports and Other Official Sources . . . . . . . . . . . . . . . . . . . . . . . .
273 275 277 281 285 288 288
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