Answer

Bridge uses individual segregated wallets per customer rather than pooled wallets. This approach provides cleaner ledgering, prevents commingling of funds, and offers better security controls. Each customer's funds are held in their own dedicated wallet, though customers can have multiple wallets if needed. The wallets are custodial, built on Fireblocks infrastructure with additional in-house security layers.

For US custody, Bridge uses its MTLs through BBI, and is pursuing a New York Trust license for additional custody and issuance capabilities. Bridge directly provides custody services rather than acting through a third-party qualified custodian.

For custodied funds, Bridge maintains segregated accounts that are bankruptcy-remote from Bridge's operating funds. The majority of reserves are held in Treasury bills with BlackRock, while cash portions are held in FBO (For Benefit Of) accounts at regulated banks. The setup is designed so that in case of Bridge's failure, customers would have direct claims to their pro-rata share of the underlying reserves. Additionally, USDB has security features like freezing capabilities to protect against theft.

Bridge has a structured wallet migration process that maintains wallet IDs while potentially changing underlying addresses. For asset transfers, Bridge uses a two-step process: funds are first moved to inventory wallets before being distributed to new wallets. The system supports cross-chain migrations and ensures wallets can still receive funds during migration. Bridge communicates changes to developers in advance and provides time for them to update their implementations.