Escrow Accounts
CheckSig Clear provides a secure, transparent, and compliant escrow service dedicated to safeguarding digital assets used as collateral in crypto lending or other pledge-based agreements. Although not authorized to grant credit, the service functions as an impartial custodian, ensuring asset protection throughout the entire transaction lifecycle.
How the Escrow Service Works
Collateral Deposit
Parties involved in a crypto pledge contract can deposit cryptocurrencies—such as Bitcoin, Ethereum, or other digital assets—into a secure escrow arrangement under the supervision of an independent and impartial third party. Deposited assets are held in full compliance with regulatory standards, and the custody setup is designed to support audits and independent verification at any time.
Secure and Insured Management
Once in the custody environment, the deposited crypto assets are fully insured and safeguarded by state-of-the-art security protocols, with the same rigorous protection applied to all other assets. Asset segregation practices are enforced to prevent commingling, ensuring the highest level of security and reinforcing confidence that assets are securely maintained at all times.
Transparency with Proof-of-Reserves
Through the Proof-of-Reserves system, both creditors and debtors can instantly verify the existence and secure custody of assets. Real-time visibility of the escrowed assets provides full transparency, allowing all parties to monitor their status at any moment, fostering trust and ensuring a transparent process from start to finish.
Contract Conditions and Liquidation
The crypto assets remain in custody until the contractual conditions agreed upon by the creditor and debtor are met. If predetermined limits or thresholds are reached, the assets are immediately liquidated. The liquidation occurs instantly to ensure compliance with the contract terms, safeguarding the interests of both parties.
In connection with crypto-backed loans, CheckSig does not act as a lender, promoter, intermediary, agent, or finder. CheckSig does not offer financial advice or solicit, arrange, or facilitate lending transactions.
CheckSig’s sole function in such arrangements is to serve as a neutral escrow agent, holding digital assets in custody and carrying out instructions solely as directed by the lender and the borrower. Although CheckSig is contractually bound to act in accordance with the terms of the loan agreement, it does not participate in the negotiation or determination of any loan terms—including, without limitation, the loan amount, interest rate, duration, or collateral requirements—all of which are independently agreed upon by the contracting parties.
