On-site inspection: what the decision maker looks at
An on-site inspection checks whether daily operations match what the authorisation file says. The decision maker reads client records, wallet controls, transaction logs, and staff answers to direct questions, then judges whether a gap is administrative or systemic. That single judgement decides the next step — a remediation plan, a formal notice, or an extension of the supervision period.
What happens during the visit
The inspection is not a document review from a desk. It is a comparison between the file the entity submitted at authorisation and the file the entity actually runs. The decision maker arrives with a checklist built from that original submission and tests it against current practice: who signs off transactions, who holds the private keys, who approves a new client, and whether the answer on paper matches the answer given on the spot.
Three things get more weight than anything else on the checklist: segregation of client assets from firm assets, the audit trail behind each transaction, and whether staff interviewed independently give consistent answers. A mismatch on any of the three moves the visit from routine to escalated within the same day.
| Stage | What the decision maker checks | Typical duration |
|---|---|---|
| Opening meeting | Scope of the visit, who from the entity will be present, which systems will be shown live | Half a day |
| Document walkthrough | Policies match the version filed at authorisation; no undisclosed amendment | 1–2 days |
| Live system check | Wallet controls, access logs, approval chain shown in real time, not reconstructed after the fact | 1–3 days |
| Staff interviews | Consistency between what management says and what operational staff confirms independently | 1 day |
| Closing meeting | Preliminary findings stated to the entity before the written report is drafted | Half a day |
The closing meeting matters more than most entities expect. Anything said there is what the decision maker already believes; the written report that follows rarely departs from it. This is the point where correcting a misunderstanding is still cheap.
What to prepare before the visit
- The compliance officer assembles the current version of every policy referenced in the authorisation file, not a summary of it.
- IT or the technical lead confirms that access logs for the review period are exportable in a readable format, not only stored in raw form.
- Management designates one person to answer procedural questions during the visit, so the decision maker is not passed between departments.
- The compliance officer maps which registries and jurisdictions the entity's activity touches, so no obligation is missed at the walkthrough stage — the exercise is close in structure to mapping AI obligation mapping step by step, and the same discipline applies here.
- Legal counsel reviews any prior correspondence with the supervisory authority for open items that the inspection is likely to reference.
Preparation that starts once the inspection notice arrives is usually too late for the document walkthrough stage. The file should already be current, not brought up to date for the visit.
Who decides and how long it takes
The inspection team reports internally to a supervisory decision-maker, who is separate from the inspectors and who reviews the findings before any formal step follows. This separation exists so the person who observed the entity is not the same person who decides the consequence.
Once the closing meeting ends, the written report typically follows within a few weeks. The entity is usually given a fixed window to respond in writing before the decision-maker acts on the findings. Silence during that window is treated as acceptance of the findings as stated, not as a request for more time.
If your situation differs
If the finding concerns asset segregation only — the usual path is a remediation plan agreed with the authority rather than a formal notice. The negotiation of that plan follows its own logic, separate from the inspection itself.
If the inspection surfaces a dispute over a registered mark or design used in the entity's branding — a change in recorded ownership sits on a different track and does not stop the supervisory process. Its own procedure is described in Recordal of assignment step by step.
If the inspection reveals that a contractor, not the entity, controls the underlying code — that ownership question is resolved through a separate track before the supervisory finding can rely on the code as an asset of the entity. See AI products and models — when a contractor claims for how that question is framed.
What this page does not cover
This page describes the inspection procedure only. It does not set the licence fee, the supervision period, or the categories of activity that trigger authorisation in the first place — those questions belong to a separate part of the file. It also does not cover an inspection triggered by a third-party complaint rather than routine supervision; the trigger changes the scope of what gets checked.
Verified
This description reflects published supervisory practice for authorised digital asset entities and the procedural stages consistently observed across recent inspection cycles. Last checked against current guidance published by the relevant supervisory authority.
Related reading
An inspection finding often runs in parallel with a remediation negotiation. The steps in that negotiation are set out in Remediation plan agreement step by step.
If the inspection concerns a tokenised instrument and control over the underlying contract is already in question, the more urgent issue may be the one addressed in When the issuer loses control of the contract.
Frequently asked questions
How long does an on-site inspection take in practice?
The on-site portion usually runs three to five working days, depending on the number of systems reviewed. The written report follows within a few weeks of the closing meeting.
Which documents are needed to start?
The current versions of every policy referenced in the authorisation file, exportable access logs for the review period, and a single point of contact designated in advance.
What happens if the entity does not respond to the findings?
Silence during the response window is treated as acceptance of the findings as written. The decision-maker then acts on that basis, without waiting for a late reply.