Abstract
This work presents a comprehensive, technology-agnostic SOX (Sarbanes-Oxley) and ICFR (Internal Controls over Financial Reporting) framework tailored for digital asset, blockchain, and Web3 enterprises. The rapid expansion of decentralized technologies and digital custody models introduces new risks that traditional financial control programs are not designed to address. This paper provides an end-to-end, multi-layer control architecture that integrates modern cybersecurity practices, blockchain-specific controls, and regulatory expectations across COSO, PCAOB, NIST, and evolving digital asset guidance.
The framework includes entity-level governance, digital asset custody controls, key-management procedures, multi-signature governance, smart-contract change management, stablecoin and token issuance safeguards, exchange integrity controls, and automated reconciliation of on-chain and off-chain data. It further incorporates IT General Controls for blockchain infrastructure, continuous monitoring methods, proof-of-reserve models, valuation procedures under volatility, and automated IPE validation.
This universal program is designed for custodians, exchanges, tokenization companies, digital banks, and Web3 infrastructure providers. It enables organizations to achieve reliable financial reporting, strengthen operational resilience, and meet regulatory expectations while maintaining technology neutrality. The proposed framework serves as a practical blueprint for companies seeking to build or modernize a SOX-compliant control environment in the digital asset sector.
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 License.
Recommended Citation
Bharathan, Ramkumar, "A Comprehensive SOX and ICFR Architecture for Digital Asset Custodians, Exchanges, and Tokenization Platforms", Technical Disclosure Commons, (November 20, 2025)
https://www.tdcommons.org/dpubs_series/8911