Recovery and Resolution

Overview

Recovery actions aim to keep a viable institution or service operating through liquidity measures, capital support, risk reduction, transfer restrictions, asset sales, or operational restoration. Resolution applies when recovery is insufficient and authorities or appointed parties must restructure, transfer, or close the business.

For custody and wallet providers, planning must address asset segregation, key control, records, customer communication, withdrawals, sub-custodians, and continuity of critical technology. Blockchain access alone does not resolve legal claims, shortages, or ownership disputes.

Plans should identify severe scenarios, decision authority, triggers, funding, data, transfer mechanisms, and barriers to orderly exit. Customer assets and corporate assets must remain distinguishable. Exercises should test whether another operator can understand accounts and regain controlled access. Recovery and resolution planning should not be confused with an ordinary user wallet restore.

Recovery and Resolution differs from ordinary retry or customer support because it restores authority after a control failure. For example, reinstalling an application is not successful recovery until the correct accounts, networks, balances, policies, and transaction history are reproduced and compromised authority can no longer act.

The scope of Recovery and Resolution should identify the protected wallet, key, account, service, or business process; the triggering failure; who may declare the incident; which identity and entitlement evidence is required; and the recovery point and recovery time objectives that govern restoration.

For Recovery and Resolution, important risks include fraudulent recovery requests, guardian collusion, unavailable shares, outdated backups, compromised cloud accounts, missing derivation metadata, untested procedures, and simultaneous loss of primary and backup systems. For Recovery and Resolution, independent storage and periodic exercises reduce correlated failure but introduce their own custody obligations.