Belarus -- Custody Regulations Regulatory Overview

Belarus has a unique regulatory framework for cryptocurrencies and digital assets, primarily governed by Presidential Decree No. 8 of December 21, 2017, "On the Development of the Digital Economy" (and subsequent amendments). This decree established the Hi-Tech Park (HTP) as the primary regulatory and supervisory body for companies operating in the digital asset space within Belarus.

The HTP provides a "special legal regime" for its resident companies, which includes significant tax benefits and a specific regulatory environment for cryptocurrency activities.

Here's a breakdown of the custody regulations:

Overall Regulatory Framework

The key legislation is:

• Presidential Decree No. 8 "On the Development of the Digital Economy" (2017): This decree legalizes cryptocurrencies and sets the framework for activities like mining, exchange, and the creation/placement of tokens. It defines various terms including "digital sign (token)," "cryptocurrency," and "cryptocurrency exchange operator."
  • Reference (English summary/analysis - finding direct official English text can be challenging): Many legal firms have published summaries. For example, Sorainen provides a good overview: https://www.sorainen.com/publications/belarus-decree-no-8-on-the-development-of-the-digital-economy/
  • Reference (Russian, official source - National Legal Internet Portal of the Republic of Belarus): https://pravo.by/document/?guid=3871&p0=Pd1700008

Within this framework, companies that wish to engage in digital asset activities, including custody, must become residents of the Hi-Tech Park (HTP). The HTP administration supervises and regulates its residents.

Custodial License Requirements

• No standalone "custodial license": Belarus does not issue a specific "digital asset custodial license" in the traditional sense, separate from a broader digital asset service provider license.
• HTP Residency: The primary requirement to operate as a digital asset custodian (among other services) is to become a resident of the Hi-Tech Park (HTP).
  • HTP residency grants the right to engage in activities related to digital tokens, including their storage and transfer.
  • Applicants for HTP residency must submit a business plan, demonstrate a suitable business model, and comply with HTP's internal rules and oversight, including AML/CFT requirements.
• Relevant Provisions in Decree No. 8: Article 4.2 of Decree No. 8 defines "cryptocurrency exchange operator" and "other operator" as entities engaging in activities like storage, transfer, and exchange of digital signs (tokens). It explicitly states that "storage of tokens on their own accounts for their clients" is an activity permitted for HTP residents.

Segregation of Client Assets Rules

• Decree No. 8's Stance: The decree itself does not explicitly detail strict segregation requirements in the way traditional financial regulations do (e.g., mandating separate legal entities or specific trust accounts for client funds vs. operational funds).
• Implicit Expectation/Best Practice: While not explicitly codified in the primary decree, reputable digital asset service providers are expected to employ robust internal controls. Given the HTP's oversight and AML/CFT requirements, ensuring proper accounting and logical segregation of client assets from the firm's own assets would be a strong expectation and potentially an internal HTP guideline or a condition of residency for a particular operator.
• HTP Oversight: The HTP administration reviews the business operations and internal policies of its residents. It is highly probable that during the application or ongoing supervision, they would require companies to demonstrate adequate risk management and operational controls for safeguarding client assets, which would typically include some form of asset segregation.

Insurance/Bonding Requirements

• No explicit mandate: Presidential Decree No. 8 does not explicitly mandate specific insurance or bonding requirements for digital asset custodians (HTP residents).
• Industry Practice: While not legally required, well-established and responsible digital asset custodians often obtain cyber insurance, crime insurance, or other forms of coverage to protect against potential losses due, for example, to hacks, theft, or operational errors. This would be a business decision rather than a regulatory mandate in Belarus.

Cold Storage Mandates

• No explicit mandate: Decree No. 8 does not explicitly mandate the use of cold storage or any specific technology for safeguarding digital assets.
• Security Expectations: Custodians are generally expected to implement strong security measures to protect client assets. The choice between hot, warm, or cold storage, multi-signature wallets, hardware security modules (HSMs), etc., is typically left to the operator's discretion, based on their risk assessment and technological capabilities. The HTP's oversight would likely focus on the overall security framework and risk management rather than prescribing specific technological solutions.

Qualified Custodian Definitions

• No specific definition: Belarus does not have a specific legal definition of a "qualified custodian" analogous to those found in other jurisdictions (e.g., the SEC's definition in the US for registered investment advisers).
• Functional Equivalent: Within the Belarusian framework, an HTP resident that is authorized by the HTP administration to perform digital asset storage services for clients effectively acts as the qualified custodian. The "qualification" stems from achieving and maintaining HTP residency and adhering to the HTP's supervisory requirements.

Pending Custody Legislation

• As of my last update, there are no widely reported pending legislative changes specifically targeting digital asset custody that would significantly alter the existing HTP-centric framework in Belarus. The country has largely maintained its approach under Decree No. 8 since its implementation.
• However, digital asset regulations are dynamic globally. The HTP administration might issue internal guidelines or recommendations for its residents, but major legislative overhauls are not publicly anticipated.

Summary

Belarus's approach to digital asset custody is integrated into its broader HTP special legal regime. The core requirement is HTP residency, which then subjects companies to the oversight of the HTP administration. While the primary decree is less prescriptive on operational details like asset segregation, insurance, or specific storage methods, these aspects would generally fall under the HTP's general supervision and the expected best practices for financial service providers dealing with client assets.

Disclaimer: Regulatory landscapes for digital assets are highly dynamic. This information is for general informational purposes only and does not constitute legal advice. You should consult with a qualified legal professional for advice tailored to your specific situation in Belarus.