Digital asset treasury (DAT) companies should use third‑party custodians to secure funds, enable investor audits, and reduce operational risk; custody by an independent provider helps verify reserves and prevent single‑point failures highlighted by recent DAT collapses such as QMMM.
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Use independent custodians
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Investor-audited account setup provides transparency and trust.
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QMMM’s 959% stock spike and halted trading exposed custody and governance gaps.
Digital asset treasury (DAT) custodians: ensure third-party custody, investor audits, and transparency to limit risk — learn how to protect treasury assets now.
By COINOTAG | Published: October 17, 2025 | Updated: October 17, 2025
What are digital asset treasury (DAT) companies and why should they use custodians?
Digital asset treasury (DAT) custodians are independent third‑party providers that securely hold crypto assets on behalf of companies. Using a custodian offers audited account setup, custodial controls and segregation of duties, reducing the chance of misappropriation or loss while increasing investor confidence.
How did the QMMM case underline custody and governance risks for DAT firms?
QMMM, an early DAT entrant, saw a 959% stock appreciation before trading was suspended and a peak market valuation reported near $990M. The company reportedly raised $8M in a recent public round and previously completed an $8.6M IPO in 2024. Local reports indicate QMMM may have vacated Hong Kong offices in September, and U.S. regulators flagged social media activity as potential market manipulation. These events illustrate how rapid market moves and opaque treasury practices can create sharp downside and regulatory scrutiny.
All DAT companies should use 3rd party crypto custodians with account setup audited by investors.
This is a prerequisite for any @yzilabs investments in any #BNB DATs.
— CZ 🔶 BNB (@cz_binance) October 17, 2025
Changpeng “CZ” Zhao, founder of Binance, emphasized that DAT companies — particularly projects tied to the BNB ecosystem — should adopt third‑party custody with investor‑audited setups. Zhao noted that custody is a prerequisite for certain ecosystem investments, underscoring the link between institutional capital and custody standards.
Market observers and reporting outlets (plain text source references: TradingView; Cryptopolitan) show no clear evidence that QMMM completed any material crypto purchases despite public statements about a planned multi‑asset treasury strategy targeting BTC, ETH and SOL. The absence of transparent, auditable custody records makes it difficult to verify treasury claims.
QMMM had an anomalous rally before its trading was suspended, causing additional short liquidations. | Source: TradingView.What governance and transparency measures reduce DAT risk?
Key measures include segregated custodial accounts, multi‑party signatories, independent attestations of reserves, and periodic third‑party audits. Public disclosure of on‑chain wallets with proof‑of‑reserve methodologies — where appropriate and secure — allows investors to reconcile declared holdings with on‑chain data. Industry experts, including Tom Lee (BitMine), have noted that many DATs now trade below the value of their declared crypto treasuries, increasing the importance of verifiable custody and independent validation.
Frequently Asked Questions
Did QMMM actually buy crypto for its treasury, and can investors confirm purchases?
Public records and reporting show no verifiable on‑chain proof that QMMM completed significant crypto purchases. The company disclosed an $8M public raise and an $8.6M IPO in 2024, but without audited custodial records or transparent wallet disclosures, investors cannot confirm treasury acquisitions.
How can investors tell if a DAT company uses a reputable custodian?
Ask for custodial agreements, auditor attestations, proof‑of‑reserve reports, and details on account setup procedures. Reputable custodians and auditors issue formal statements that investors can verify; these disclosures sound natural when read aloud and provide clear, factual reassurance.
Key Takeaways
- Independent custody is essential: Third‑party custodians reduce operational and counterparty risk for DATs.
- Transparency matters: Audited account setups, proof‑of‑reserve reports, and attested wallets help validate treasury claims.
- Investor due diligence: Request custodial agreements and auditor attestations before allocating capital to DATs.
Conclusion
The QMMM episode reinforces that digital asset treasury (DAT) custodians and robust governance are core to sustainable treasury models. Independent custody, investor‑audited setups and transparent attestations reduce risk and support market integrity. Market participants and institutional investors should prioritize custody standards when evaluating DAT opportunities; COINOTAG will continue to monitor developments and report verified updates.
