Custody rules in most jurisdictions require fund assets to be held by a custodian that is independent of the manager. For digital assets this means a custodian licensed to hold private keys on behalf of clients, with segregated wallets, insurance and audited controls.
Allocators check who the custodian is, how it is regulated, whether assets are segregated, and who can instruct a withdrawal. The last point is the critical one: the manager should be able to trade the assets but never move them out of the fund.