Stellar Protocol 17 introduced asset clawback functionality, enabling authorized entities to recover digital securities for regulatory compliance, fraud prevention, and lost key recovery. Co-authored by Securrency, this feature addresses institutional adoption concerns and regulatory requirements for custodying digital assets.
The Stellar Development Foundation announced Protocol 17 approval in June, introducing asset clawback via CAP-35, co-authored by Securrency. The feature allows issuers to recover fraudulently obtained assets, respond to regulatory actions, and enable recovery of lost or stolen assets. Securrency's hybrid custody framework merges traditional and blockchain models, using off-chain control locations to mirror on-chain transactions while enabling clawback authority. This addresses SEC and FINRA concerns about broker-dealer custody of digital securities and supports the five-year safe harbor for digital asset custody. Built-in protections include identity verification, delegation authority tracking, and immutable recording of all clawback actions on the blockchain.
