Custody Framework

Status: v1.0 live. Counsel posture confirmed by Drew 2026-06-05; counsel review continues as a parallel workstream Drew manages directly, not a build gate. This document is the canonical custody architecture for the platform — every Circle's Bylaws, every Treasurer's certification, and every loan instrument references it.

For Members: A Member-friendly guide to the three categories — with a decision matrix and the Category A vote procedure — is at /learn/custody-framework. Read the guide first if you are forming a Circle or considering whether to become a Treasurer. The Charter below is the constitutional source.

Note on naming. This Custody Framework is operative architecture. References to "Town Hall," "Dispute Settlement Centre," "Wellbeing Centre," and other institutional district names remain canonical here. For Member-facing navigation and copy, Circlworld uses simplified naming (Town Hall → Community; Dispute Settlement Centre → Resolutions; Wellbeing Centre + Help Office → Wellbeing & Help). The two layers coexist intentionally per the District Language Reframe brief (1 June 2026).

Preamble

Money in a Circle moves between Members. The Treasurer coordinates that movement. The question this Framework answers is: where does the money actually sit between hands? The answer has three branches depending on what the money is for, who is contributing it, and where the contributing Members live.

This Framework establishes three custody categories. The first allows Members to choose; the second and third are platform-level rules. Each category has its own protections and its own legal posture.

This document is the canonical reference. The Treasurer Code of Conduct, the TEP Methodology, the Treasurer Agreement, and the Pool Establishment Terms all cite this Framework for their custody language. If those documents conflict with this one on a custody matter, this Framework prevails.

Section 1 — The three categories

The platform recognises three categories of money flowing through a Circle, each with its own custody rule.

1.1 Category A — Regular cycle contributions

The money Members contribute on the agreed cycle, paid out to the receiving Member on the agreed rotation.

Custody rule: Member-to-member OR escrow-held, chosen by Member vote at Circle formation, recorded in the Circle's Bylaws. (See Section 2.)

1.2 Category B — Loan accounts and the Circle Protection Reserve

The money that backs a lending pool, the Member contributions to the Circle Protection Reserve (CPR), and any pool capital under the Lending Center framework.

Custody rule: Escrow-held only. Member vote does not apply. Multi-signature mandate is constitutional. The account is opened in the name of the Circle's (or federation's) own member-constituted co-operative legal form. (See Section 3.)

1.3 Category C — Cross-border Circles

Any Circle that crosses a jurisdictional boundary — Members resident in more than one jurisdiction, a Treasurer resident in a different jurisdiction from any Member, or contribution currency mismatched with the Treasurer's banking jurisdiction.

Custody rule: Escrow-held only for all categories of money flowing through that Circle. Member vote does not apply. (See Section 4.)

Section 2 — Category A: Regular cycle contributions

2.1 The hybrid choice

For single-jurisdiction Circles with no lending pool, the Members vote at Circle formation on which of two custody models the Circle will adopt:

(a) Member-to-member custody. Each round, Members contribute directly through their own bank accounts to whoever is due that cycle's payout. Funds are never held by Circlworld and never held by the Treasurer's personal account. The Treasurer governs the rotation, records each contribution on the platform, and confirms each payout. The audit trail is the Members' principal protection.

(b) Dedicated Circle account. Contributions sit in a dedicated multi-signature account opened in the name of the Circle's own member-constituted co-operative legal form, custodied at a regulated bank or credit union as account provider. No single signatory can disburse.

The choice is constitutional to the Circle and recorded in the Bylaws. In neither model are funds held by the Treasurer's personal account or by Circlworld.

2.2 Why both models remain valid

(a) Member-to-member custody honours the cultural tradition. Pardna, susu, ajo, and many other rotating-savings traditions historically operated through trusted-person coordination, with Members contributing through their own channels. Members chose Treasurers they trusted to govern the rotation faithfully. Where Members continue to prefer that model, the platform supports it — with the platform's verifiable record acting as the modern equivalent of community memory.

(b) The dedicated Circle account adds institutional protection. A multi-signature account opened in the Circle's own co-operative form provides Members with structural protection against misappropriation. Where Members prefer that, the platform supports that too.

(c) The choice belongs to the Members. The Cultural Architecture Policy v2.0 (2026-05-30) places this kind of practice decision with the Members of each Circle rather than with platform staff. Member-led custody choice is consistent with that direction.

2.3 The single-jurisdiction rule

Member-to-member custody is available only for Circles in which all Members and the Treasurer reside in the same jurisdiction. The reason is enforcement: Members' protection in the member-to-member model depends on the ability to pursue civil and criminal remedies in their own jurisdiction's courts in the unlikely event a Member fails to send their contribution to the receiving Member. The moment the Circle crosses a border, that protection collapses (Section 4). Member-to-member custody is therefore single-jurisdiction by definition.

2.4 Treasurer eligibility (Category A)

A Treasurer governing a Category A Circle must, before commencing the role:

(a) Confirm with each receiving Member, for each round, the routing details Members will use to send their contributions (account number / sort code / mobile-money handle, depending on the local norms). The platform records these for transparency.

(b) Where the Bylaws have voted for the dedicated Circle account model, ensure the multi-signature account is opened in the Circle's co-operative form before contributions begin.

(c) Sign the Treasurer Code of Conduct, including the custodian-of-trust pillar as it applies to the Member-to-member model.

(d) Submit to the platform's audit trail discipline (Section 6).

Where the Treasurer's bank refuses to accept the Circle activity, the Circle has three options:

(i) Move the Circle to escrow-held custody (a Bylaws amendment under Section 7).

(ii) Choose a different Treasurer whose bank will accept the activity.

(iii) Continue under the bank's terms, with the Treasurer's full disclosure to Members of any constraint the bank has imposed.

2.5 Escrow-held custody for Category A

Where the Circle has voted escrow-held for cycle contributions:

(a) A dedicated multi-signature account is opened in the name of the Circle's own member-constituted co-operative legal form (the Circle's own collective vehicle, registered in the jurisdiction).

(b) The signature mandate requires at least two of the Circle's mandated signatories on any disbursement. The Treasurer is one of the mandated signatories but is never a sole signatory.

(c) The bank or credit union custodying the account acts as account provider only — never as lender, never as decision-maker on disbursements. The account provider executes mandates the signatories submit.

(d) The Treasurer coordinates the disbursement under the multi-signature mandate. The Treasurer does not hold the funds.

Section 3 — Category B: Loan accounts and the CPR

3.1 The escrow-only rule

Money in any of the following accounts is escrow-held only. Member vote does not apply. The Circle's Bylaws cannot adopt Member-to-member custody for these funds.

(a) Lending pool capital — Member pool contributions to an active lending pool under the Lending Center.

(b) The Circle Protection Reserve (CPR) — the Member contributions to the Circle's Protective Reserve under the CPR Architecture v1.1.

(c) Loan disbursement accounts — the accounts from which approved loans are disbursed to borrowers.

(d) Collateral escrow accounts — accounts holding cash collateral or proceeds of liquidated security under the Collateral Terms.

3.2 Why escrow-only on Category B

(a) The Lender Model requires it. The lender is the Circle (or federation), acting through its own member-constituted co-operative legal form. The pool capital sits in a dedicated multi-signature lending account in that co-operative form. Member-to-member custody for pool capital would contradict the Lender Model architecture.

(b) Multi-signature discipline is constitutional. The Lending Committee — Member-elected, term-limited — provides the multi-signature mandate. A loan disbursement requires at least two Committee signatures. No single individual can move pool funds. A personal-Treasurer account collapses that protection.

(c) The regulatory regime requires institutional custody. Lending activity attracts FCA Part 4A permission in the United Kingdom under CONC and Bank of Jamaica oversight under the Banking Services Act 2014. Both regimes require the account to sit in an institutional structure, not a personal one.

(d) The loss-asymmetry argument. A Treasurer who misappropriates cycle contributions harms the cycle Members of one rotation. A Treasurer who misappropriates pool capital can collapse multiple loan arrangements, harm every pool contributor, and trigger the loss waterfall. The risk is asymmetric; the rule responds.

3.3 The Lending Committee as signatories

The Lending Committee's elected members are the signatories on Category B accounts. The Treasurer is not automatically a signatory — the Treasurer is one Member among many on the Circle, and Committee membership is an elected role under the Lending Committee Terms. Where the Treasurer is elected to the Committee in their own right, the Treasurer is a signatory in that capacity, not as Treasurer.

3.4 Cross-references

The detailed mechanics of Category B custody live in:

• Lending Pool Establishment Terms — pool formation, account opening, signature mandate.
• Lending Committee Terms — Committee composition, election, decision procedure.
• Circle Protection Reserve Architecture v1.1 — CPR mechanics, refund mechanism, departure categories.
• Collateral Terms — escrow custody of cash collateral.

This Framework states the rule that those documents elaborate.

Section 4 — Category C: Cross-border Circles

4.1 The escrow-only rule

A Circle that crosses any jurisdictional boundary, as defined in Section 4.2, must use escrow-held custody for all funds flowing through the Circle — cycle contributions, lending pool capital (if any), CPR, and any other Member-contributed funds. Member-to-member custody is not available to cross-border Circles.

4.2 The definition of "cross-border"

A Circle is cross-border if any of the following is true at the time of the Circle's formation or at any time during its operation:

(a) Members of the Circle reside in more than one jurisdiction.

(b) The Treasurer of the Circle resides in a jurisdiction different from any Member of the Circle.

(c) The contribution currency is different from the currency of the Treasurer's banking jurisdiction (for example, JMD contributions into a UK Treasurer's GBP account).

A Circle that is single-jurisdiction at formation but becomes cross-border later — for example, by admitting a Member resident in a second jurisdiction — must move to escrow-held custody before that Member's first contribution. The Bylaws are amended accordingly under Section 7.

A Circle whose Treasurer relocates to a different jurisdiction must move to escrow-held custody before the relocation completes. The Bylaws are amended; if the Members do not consent, the Treasurer steps down and the Circle elects a successor.

4.3 Why escrow-only on Category C

(a) No single court can adjudicate. A Member's protection under the Member-to-member model depends on access to a court that can compel disclosure, asset preservation, and judgment enforcement against the Treasurer. Cross-border Circles defeat that — UK courts have personal-jurisdiction issues over a Jamaica-resident Treasurer; service in Jamaica is complex; judgment enforcement requires reciprocal-enforcement treaties that may not apply.

(b) AML / CTF scrutiny is heightened. Cross-border money movement triggers Suspicious Activity Reports under POCA 2002 in the United Kingdom and the equivalent regime under POCA in Jamaica. A neutral escrow agent absorbs that scrutiny under its own regulated AML framework rather than placing it on the Treasurer's personal banking relationship.

(c) Currency conversion needs neutrality. A Treasurer holding personal-account funds across currencies becomes an FX conduit. A neutral escrow agent handles conversion under regulated FX-services rules, with transparency to the Members.

(d) No cultural cost. Cross-border Circles do not typically arise from village-level tradition. They are diaspora and corridor formations that did not have a Member-to-member custom — the escrow-only rule has no tradition to displace.

Section 5 — Multi-custody Circles

5.1 Where Categories coexist

A Circle may operate Category A (regular cycle contributions) under Member-to-member custody while simultaneously operating a Category B lending pool under escrow-only custody. The two categories live in separate accounts under different rules:

(a) Member-to-member cycle flows — Members contribute directly through their own bank accounts to the receiving Member each round. The Treasurer records each contribution but does not hold cycle funds in any personal or platform account.

(b) Escrow-held pool account — the dedicated multi-signature account in the Circle's co-operative form, holding pool capital, CPR contributions, and any loan-related funds.

The Treasurer reconciles each separately. The platform's audit trail records each separately.

5.2 No commingling

A Treasurer of a Multi-custody Circle does not commingle the two flows. Pool money never sits in the Treasurer's personal account at any time. Cycle contributions flow Member-to-Member and never pass through the pool's dedicated account. Where a Member contributes to both surfaces in the same payment, the contribution is split at the platform's processing layer; the Treasurer routes each portion to its proper destination.

5.3 The Treasurer's signature on the escrow account

The Treasurer of a Multi-custody Circle is generally not a signatory on the escrow account in their Treasurer capacity. Where the Treasurer is also an elected member of the Lending Committee, they are a signatory in that capacity (one of the Committee's two-of-N mandate), not by virtue of being Treasurer.

Section 6 — The audit trail across all categories

6.1 Platform recording

The platform records every contribution, confirmation, and disbursement across all custody categories. The audit trail is the Member's primary protection regardless of which custody model their Circle has adopted. In Member-to-member custody, the audit trail is the principal evidence Members rely on if a dispute arises. In escrow-held custody, the audit trail mirrors the account ledger the escrow provider maintains.

6.2 Reconciliation

The Treasurer reconciles activity to the audit trail on the cadence the Circle's Bylaws require, with a minimum cadence published by the platform. Discrepancies are investigated and, if unresolved, raised through the Help Office.

6.3 Member access

Every Member of a Circle has access to the audit trail for that Circle, regardless of the custody model. Members can verify their own contributions and the disbursements made under their cycle. The platform's recording is transparent to Members.

Section 7 — Custody-model changes

7.1 Changing the custody model mid-life

A Circle's custody model may be changed during the Circle's life by Bylaws amendment, subject to:

(a) Supermajority vote. Custody-model changes require an affirmative vote of at least 75% of the Circle's Members entitled to vote, with the standard 14-day notice and 50% quorum.

(b) Transitional procedure. The current cycle completes under the existing custody model. The new custody model applies from the start of the next cycle. Members who joined under the old model are deemed to have consented to the change by participating in the new cycle.

(c) Treasurer's right of withdrawal. Where the change requires the Treasurer to operate under a custody model substantially different from the one they accepted, the Treasurer may withdraw under the standard 30-day notice without prejudice. The Circle elects a successor.

(d) No regression for Category B or C. Once a Circle is operating loan accounts (Category B) or has crossed a jurisdictional boundary (Category C), the escrow-only rule applies. The Circle cannot vote to move Category B or Category C funds to Member-to-member custody.

7.2 Adding a lending pool to a Member-to-member Circle

A Member-to-member cycle Circle that wishes to establish a lending pool becomes a Multi-custody Circle under Section 5. The pool sits in escrow under Category B; the cycle contributions remain under the existing Category A model. The Bylaws are amended to record the new lending pool's existence.

7.3 Cross-border emergence

A single-jurisdiction Member-to-member Circle that becomes cross-border by admitting a Member from a second jurisdiction (or by Treasurer relocation) must move to escrow-held custody before the cross-border activity begins. The Bylaws amendment under Section 7.1 applies; the supermajority vote is replaced with the cross-border-mandated escrow move under Section 4.

Section 8 — Application

8.1 Existing Circles

Circles that exist at the effective date of this Framework continue under their current custody arrangements. They are encouraged but not required to ratify their custody model under this Framework at their next Bylaws review. Circles that are operating any Category B funds under non-conforming custody must transition to escrow-only within twelve (12) months of this Framework's effective date.

8.2 New Circles

Circles formed after the effective date of this Framework adopt the Framework at formation. The Bylaws of a new Circle include the custody-model election under Section 2.1 (or, for cross-border Circles, the escrow-only declaration under Section 4).

8.3 Treasurer acknowledgement

A Treasurer who serves any Circle accepts this Framework as part of their certification. The Treasurer Code of Conduct re-signs at certification reference this Framework as the custody architecture they administer within. Where the Treasurer's Circles operate under multiple custody categories, the Treasurer's acceptance covers all categories they administer.

Section 9 — Amendment

9.1 Material amendments

Material amendments to this Framework — adding or removing a custody category, changing the rules within a category, changing the cross-border definition, changing the Member-vote mechanism — require:

(a) 60 days' notice to all Treasurers and to Members of operating Circles.

(b) Consultation in the Forum.

(c) Transitional arrangements for Circles affected by the change.

(d) Town Hall governance approval.

(e) Counsel review.

9.2 Minor adjustments

Minor adjustments — clarifications, technical corrections, version updates of cited documents — are made under the standard procedure for charter clarifications and recorded in the version history.

9.3 Annual review

This Framework is reviewed annually for:

(a) Continued alignment with regulatory developments in each jurisdiction the platform operates in.

(b) Member experience under each custody model.

(c) Operational fitness of the cross-border definition as the platform expands.

Acknowledgement

By accepting any role on the platform that touches custody — Treasurer, Lending Committee member, Circle founder — the Member acknowledges that this Framework is the canonical custody architecture, that the rules in this Framework prevail over any conflicting custody language in other documents, and that the custody arrangements of every Circle they serve are subject to this Framework.

The Member further acknowledges that:

(a) the three-category structure is constitutional — Categories B and C are not subject to Member vote, by design;

(b) Member-to-member custody for Category A within a single jurisdiction is a continuing option, not a deprecated practice;

(c) the Member-vote mechanism for Category A respects the Cultural Architecture Policy v2.0 — Members decide the custody practice that fits their cultural context;

(d) the cross-border definition can change a Circle's custody status mid-life — admitting a Member from a second jurisdiction triggers escrow-only.

— End of the Custody Framework —

Version history

| Version | Date | Change | Process | |---|---|---|---| | v1.0 | 2026-06-03 | Initial draft consolidating the three-category custody architecture (Member-to-member vs escrow-held by Member vote for cycle contributions; escrow-only for loan accounts + CPR; escrow-only for cross-border Circles) | Drafted 2026-06-03; counsel posture confirmed 2026-06-05 + §9.1 consultation + Town Hall approval before becoming binding |

Plain-language one-line summary

For your Circle's regular contributions, you and your Members choose who holds the money — your Treasurer in their own bank account (within one country only), or a multi-sig escrow account in your Circle's own co-operative form — and that choice goes in your Bylaws. For lending pool money, CPR money, and any cross-border circle's money, it's always the multi-sig escrow account — not optional, by design.