KODA Obtains SOC 1 Type 2 Certification for Custody Internal Controls

Korea Digital Asset Co., or KODA, said on June 2 that it had obtained SOC 1 Type 2 certification, an international standard for internal controls.

SOC 1 Type 2 is an international assurance standard under which an external auditor verifies whether a service organization's internal control system affecting client asset safekeeping and financial reporting has been appropriately designed and operated over a certain period.

The review covered KODA's digital-asset custody operations, including cold-room management, wallet creation and withdrawal processes, wallet and deposit-and-withdrawal management, access controls and physical security facilities.

KODA said it also upgraded its cold-wallet infrastructure as part of the certification process. The company introduced hardware security modules, or HSMs, certified under U.S. Federal Information Processing Standards, or FIPS 140-2 and 140-3, to build a multisignature-based cold-wallet system.

Its cold room for storing cold wallets is equipped with fireproof safes, electromagnetic pulse-blocking facilities, automatic fire-suppression devices, uninterruptible power supply systems and physical access control systems.

"The core of digital-asset custody is not simply storage, but continuously having the technical, physical and operational control framework that protects client assets verified by external institutions," Chief Executive Officer Cho Jin-seok said. "This SOC 1 Type 2 certification is a milestone proving that KODA's infrastructure and internal controls have been upgraded to meet institutional custody standards."

KODA, jointly established by KB Kookmin Bank and Hashed, provides custody services to institutional and corporate clients. The company said it currently holds more than 80% of South Korea's digital-asset custody market.