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Escrow Manager

Executive Summary

The Escrow Manager is a purpose-built application that ensures the integrity and security of digital asset offerings by introducing a system of checks and balances across both onchain and offchain transactions. It provides a transparent, automated, and auditable environment for managing investor funds through qualified custodians, escrow agents, or issuer-designated agents. By combining smart contracts, blockchain automation, and API-driven integrations with traditional banking systems, the Escrow Manager safeguards investors while simplifying fund reconciliation for issuers and custodians.

Overview

The Escrow Manager functions as the trusted layer between investors, issuers, and custodians, ensuring that funds are securely held and only released under predefined conditions. It supports a variety of offering types:

  • Regulated digital securities offerings (requiring qualified custodians such as banks, trust companies, or broker-dealers).
  • Non-regulated offerings (e.g., utility token sales), where issuers may designate escrow wallets and bank accounts without the need for licensed custodians.

By supporting both onchain escrow (crypto wallets) and offchain escrow (bank accounts), the Escrow Manager provides issuers and investors with a complete solution that covers all payment flows, reconciliations, cancellations, and refunds.

Capabilities

1. Onchain Escrow and Smart Contract Automation

  • Automatically transfers onchain investments into wallets held under the custody of qualified third-party custodians.
  • Upon successful completion of the offering, smart contracts transfer funds to the issuer.
  • If the offering is canceled or fails to meet its terms, funds are automatically returned to investors.
  • Supports investor-initiated cancellations before offering close, ensuring investor protection.

2. Offchain Escrow Integration

  • Enables issuers or custodians to track fiat payments made via ACH, wire transfer, or payment cards.
  • Integrates with banking APIs to detect fund receipts in escrow bank accounts.
  • Ensures digital assets are only released after offchain funds have been confirmed and signed off by the escrow agent.
  • Prevents premature issuance of digital assets by synchronizing with the Admin App.

3. Reconciliation and Recordkeeping

  • Provides dashboards for escrow agents to review onchain and offchain transactions.
  • Tracks pending, canceled, and returned transactions across both investment types.
  • Generates downloadable reconciliation and reporting data to support audits, compliance checks, and Sarbanes-Oxley requirements.
  • Maintains a full audit trail of approvals, refunds, and reconciliations.

4. Investor Protection

  • Ensures that no funds are released unless offering terms are met.
  • Allows escrow agents or custodians to authorize refunds in the case of cancellations or failed offerings.
  • Provides investors with confidence through secure fund custody, return logistics, and compliance with offering conditions.

5. Modular and Flexible Architecture

  • Automatically deactivates onchain or offchain functionality depending on the structure of the offering.
  • Adaptable for 100% onchain, 100% offchain, or hybrid investment flows.
  • Designed to evolve with market needs, supporting new features and integrations through a modular framework.

6. Security and Access Controls

  • Secured with two-factor authentication for all escrow agents and custodians.
  • Supports passkey-based authentication for seamless and secure login.
  • Provides role-based access, ensuring that only authorized parties can reconcile funds or approve refunds.

Strategic Value

  • For Investors: Protects their funds by ensuring return logistics and preventing asset release without payment confirmation.
  • For Issuers: Simplifies escrow management by automating reconciliation and integrating with both blockchain and banking systems.
  • For Custodians/Escrow Agents: Provides a transparent, auditable environment for overseeing investor funds, supporting both regulatory compliance and operational efficiency.
  • For Regulators and Auditors: Delivers verifiable reporting and audit trails to demonstrate compliance with financial regulations and best practices.