What FINMA's New Crypto Custody Guidance Means for Asset Managers and Their Clients

In January 2026, FINMA issued Guidance 01/2026, providing the clearest articulation yet of its expectations for how crypto assets should be custodied on behalf of clients. For asset managers who have spent the past several years navigating an evolving and sometimes ambiguous regulatory landscape, this guidance is a welcome development — not because it introduces radical new requirements, but because it crystallizes principles that had previously been inferred rather than stated.

Bankruptcy Protection and Segregation at the Core

The central theme of the guidance is unambiguous: client crypto assets must be protected in the event of a custodian's insolvency, and this protection depends on genuine segregation. FINMA's guidance reinforces that assets held on behalf of clients must be clearly separated from the custodian's own balance sheet, both legally and operationally, so that in a bankruptcy scenario, clients can recover their assets rather than being treated as unsecured creditors.

This is not a new concept in Swiss financial regulation — segregation and bankruptcy remoteness have long underpinned traditional custody — but its explicit extension to crypto assets removes any doubt that FINMA expects the same standard of client protection regardless of asset type. For asset managers selecting a custodian, this guidance gives a concrete checklist against which to evaluate whether a provider's segregation practices would actually hold up in an insolvency scenario, rather than existing only on paper.

Foreign Custodian Standards

A significant portion of the guidance addresses situations where Swiss-regulated entities rely on foreign custodians to hold crypto assets. FINMA makes clear that outsourcing custody abroad does not outsource responsibility: the Swiss entity remains accountable for ensuring that any foreign custodian meets equivalent standards of segregation, security, and bankruptcy protection. This has direct implications for asset managers who may have selected international custody providers based primarily on cost or technical capability, without conducting the level of due diligence FINMA now expects.

Guidance 01/2026 makes clear that the location of the custodian does not change the standard of protection clients are entitled to.

Obligations for Portfolio Managers

The guidance also speaks directly to independent portfolio managers and asset managers who direct client assets into crypto custody arrangements, even where they do not custody the assets themselves. FINMA's position is that a portfolio manager exercising discretion over client assets held in crypto has an ongoing due diligence obligation: understanding where and how those assets are actually held, verifying that segregation and bankruptcy protection are genuinely in place, and being prepared to demonstrate this to clients and regulators alike.

This shifts custody due diligence from a one-time onboarding exercise into an ongoing governance responsibility. Asset managers should expect to periodically reassess their custodial relationships against this guidance, rather than treating an initial custodian selection as a decision made once and never revisited.

Implications for Structured Products and ETPs

The guidance also has knock-on implications for structured products and exchange-traded products with crypto underlyings. Issuers of AMCs, Trackers, and crypto ETPs typically rely on a custodian to hold the underlying digital assets backing the instrument. FINMA's guidance effectively raises the bar for the custody arrangements that sit behind these products, meaning issuers and their distribution partners should expect closer scrutiny of custodial segregation and bankruptcy remoteness as part of ongoing product governance and investor due diligence.

What This Means Going Forward

For asset managers and their clients, the practical message from Guidance 01/2026 is one of reassurance combined with responsibility. Reassurance, because FINMA has explicitly extended the segregation and bankruptcy protection standards that clients expect from traditional custody into the crypto space. Responsibility, because portfolio managers and issuers can no longer treat custody due diligence as someone else's problem — they are expected to understand, verify, and be able to explain exactly how client crypto assets are protected, wherever in the world they are actually held.