# Custodian & SPV setup

Ledgity uses a robust regulatory and operational structure to ensure that user deposits are protected, transparently managed, and legally compliant under EU financial frameworks.

**Special Purpose Vehicle (SPV)**

User funds deposited into Ledgity yield vaults are allocated to a dedicated Special Purpose Vehicle (*SPV*).\
This SPV is a ring-fenced legal entity whose **sole purpose** is to hold and manage the underlying assets supporting yield generation.

**Key characteristics:**

| Feature                                             | Description                                                            |
| --------------------------------------------------- | ---------------------------------------------------------------------- |
| **Segregated from Ledgity corporate balance sheet** | Protects user funds in case of operational or corporate events.        |
| **No speculative activities**                       | Capital is deployed strictly according to predefined allocation rules. |
| **Fully audited and monitored**                     | Financial reporting and oversight ensure ongoing transparency.         |

The SPV ensures that **user assets remain legally protected and clearly separated** from any other activities of the Ledgity group.

**Custodian & Safeguarding Framework**

The SPV holds funds through **regulated custodians** meeting EU compliance standards.\
These custodians ensure:

* Secure storage of digital and fiat assets
* Full traceability of all asset movements
* Independent internal and external controls

This reduces counterparty risk and ensures that assets cannot be commingled or accessed outside agreed processes.

**Regulatory Alignment**

Ledgity operates as a **PSAN-registered** entity in France and structures the SPV using frameworks that are compatible with the **MiCA** regulatory regime coming into effect in the EU.

This approach allows Ledgity to:

* Provide compliant stablecoin-based yield products
* Avoid structures that would qualify as unauthorized lending or collective investment schemes
* Prepare a clear path toward **MiCA authorization in 2026**

**Why This Matters**

This framework is designed to provide:

| Benefit             | Result                                                                                                    |
| ------------------- | --------------------------------------------------------------------------------------------------------- |
| **Legal clarity**   | Yield distribution is structured in a way that is compatible with EU regulatory treatment of stablecoins. |
| **User protection** | Assets are safeguarded in a bankruptcy-remote structure.                                                  |
| **Transparency**    | Users can verify asset backing and performance.                                                           |
| **Future-proofing** | The structure is aligned with MiCA’s upcoming requirements.                                               |

***

#### **In Short**

Ledgity’s SPV and custodian setup ensures that:

**Your stablecoins remain your assets.**\
They are held in a **secure, regulated, segregated** structure — managed transparently, not rehypothecated, not exposed to speculative risks.

This is what allows Ledgity to offer **real yield, with institutional security, accessible on-chain**.