Case Study

Turning Digital Asset Custody Rails into a Collateral Management Solution

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Enhancing Crypto Risk Management and Credit Workflows

Introduction

Digital asset custodians are under pressure to move beyond safekeeping. Clients expect programmatic enforcement of a variety of credit covenants across wallets and venues — but building this infrastructure internally takes valuable time and engineering resources..

Membrane shortens that path with its CustodyLink Collateral Network, advanced margining engine, and real-time collateral alerts, giving custodians a turnkey way to move from static custody to active covenant enforcement.

The Challenge

Our client needed to enforce collateral requirements and collateral health monitoring in real time. Without automation, it was not able to easily support advanced credit arrangements.

The Solution

Collateral-as-a-Service

(Modules powering this solution)
Membrane LMS Modules
Used in Solution
CustodyLink™ Collateral Network
Yes
Real-Time Risk Engine & Alerts
Yes
Loan Lifecycle Management
No
Unified Payments Hub
No

To build an automated enforcement layer, the institution deployed Membrane’s CustodyLink™ Collateral Network in tandem with the Real-Time Risk Engine & Alerts. This setup enabled continuous monitoring of borrower vaults and credit exposures, with programmatic enforcement of client-specific LTV rules and instant breach alerts.

If a non-compliant withdrawal occurred, the system automatically generated an event and executed collateral transfers and margin calls or blocked withdrawal altogether - all while maintaining secure custody rails. Every action was fully transparent, supported by audit logs and webhooks to ensure operational integrity.

Collateral-as-a-Service
  • Expand custody into collateral enforcement infrastructure
  • Real-time collateral monitoring across wallets and venues
  • Automated margin calls and LTV breach alerts
  • Webhook-based settlement and programmatic withdrawals

Outcome

Our client moved to become a tri-party agent at the center of lending workflows, capturing new revenue streams, strengthening client trust, and defending its competitive position in a fast-moving market.

Future-Ready

The solution was designed to evolve: new collateral types, custom LTV rules, and tokenized assets can be added without re-engineering. As lending markets mature, the institution is prepared to scale services seamlessly alongside client demand.

Why It Matters

Custody alone isn’t enough. Institutions that lack enforcement infrastructure risk losing clients to more advanced competitors. Membrane provides enforcement that scales as fast as the market without requiring institutions to surrender control of client assets.