# kaal:claim:4033886-031

**Claim.** Because digital asset exchanges perform both the traditional broker dealer function and the custody function, they face uncertainties and increased liability that traditional exchanges, which never touch custody, do not bear.

**Type.** mechanism  **Support.** argued

**Holds when.**

- centralized digital asset exchanges holding customer assets

**Source quote.**

> By having the crypto exchange perform the services of a traditional broker/dealer and custody holder, digital asset exchanges face uncertainties and increased liability that do not impact traditional exchanges.124

**From.** Wulf A. Kaal, Samuel Evans, Hayley Howe, *Digital Asset Valuation* (2022), IV.1 Market Pricing, page 30

**Cite as.** Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886

**Verify.** sha256 of source PDF `52ba05b1292b1be4bfaf1ee5cf56b14fea9c196d870603e794d7ee316df129bd` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20et%20al.%20-%202022%20-%20Digital%20Asset%20Valuation.pdf

**Failure mode.** combined custody and brokerage role  (family: custody-and-key-loss)

**Topics.** defi, law-and-legal-systems

**Keywords.** custody, broker-dealer, exchange-liability, digital-assets

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.