What is an escrow agent?
An escrow agent is the independent third party in an escrow arrangement: the Trusted Third Party between the supplier and the beneficiary. The supplier deposits source code, data or a description of the environment. The beneficiary has the right to release under the agreed release conditions. The escrow agent stands in between and belongs to neither party.
The main task: an arrangement that holds up in a bankruptcy
Storing files is something anyone can do. The main task of an escrow agent is to provide a continuity arrangement that legally holds up at the moment it exists for: the loss of the supplier, for example through bankruptcy.
At that moment a receiver administers the estate and decides on the supplier’s assets. The source code is the supplier’s intellectual property and falls into the estate. A good escrow arrangement does justice to that position: in a bankruptcy it makes immediately clear to the receiver what does and does not belong to the estate, so that a deposit is directly available to the rightful party, with the accompanying right of use.
At Softcrow this is arranged as follows: upon bankruptcy a deposit automatically passes into safekeeping and thereby falls outside the estate.
That is the standard for any escrow arrangement. Whoever merely stores files, without this legal safeguard, offers a copy. Not a continuity arrangement.
The tasks of an escrow agent
- Providing an agreement that holds up: the legal basis of the arrangement, as described above. An escrow agreement that does what it promises when the supplier falls away, including when a receiver decides on the estate
- Storage of deposits: securely storing what the supplier delivers. At Softcrow: zero-knowledge and sovereign, 100% within the EU, free from the CLOUD and USA PATRIOT Act
- Guarding integrity: demonstrating that a deposit is unchanged since delivery
- Offering independent verification methods: making it possible to test the contents of a deposit in advance. At Softcrow: a free key verification and a verification investigation under the supervision of an independent NOREA Register IT auditor
- Release under conditions: making the deposit available when the agreed release conditions are met, and not before. Internationally these conditions are also known as release triggers or trigger events: the events that activate the right to release, such as a bankruptcy or the discontinuation of the service
- Independent access after release: a deposit the beneficiary can open and use on their own after release. Without vendor lock-in, without dependency on an account with a cloud platform or the ongoing payment of one. At Softcrow: an open file format (AES256-ZIP), opened with standard tools such as 7-Zip or WinZip
- Its own continuity: having arranged what happens to the ongoing obligations if the escrow agent itself falls away
Neutrality is the core of the profession
An escrow agent derives its value from belonging to neither party. That neutrality goes beyond the arrangement itself: it also applies to the business activity within which the escrow agent operates.
A provider that combines escrow with consulting, audits or platform services by definition also has other interests. However carefully that provider handles them: neutrality that has to exist alongside other interests requires the right trade-off, time and again. Neutrality that is fixed in the structure requires nothing. Parties do not have to trust it; they can establish it.
Softcrow only does escrow. No additional services, no other commercial interest. We pass no judgement on the contents of a deposit; that is not our place. Escrow is the means, not a front door. Continuity is the goal. That is a matter of principle, and has been for more than 35 years.
Not a protected profession
Escrow agent is not a protected profession. Anyone may use the name; there is no supervisory authority, no register and no statutory standard. You therefore have to assess the quality of an escrow agent yourself. Five verifiable questions take you a long way.
The five questions for every escrow agent → Top 5 providers compared →
Would you like to know what such an arrangement looks like for your situation? Feel free to consult Michel Kiès; a conversation is without obligation. Calling directly also works: +31 (0)20 696 20 50.
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