TOPIC / 34 RECORDS
Custody & recovery
A balance is not a recovery plan. Investigate signing authority, backups, intermediaries and the mistakes a technical design cannot prevent.
Build the foundation
- Custody
Custody is a separate question.
Identify who can authorize a transfer, and what happens if access fails.
- Custody
A wallet backup is a recovery plan
A seed can simplify key recovery, but only if the actual wallet, settings, and secrets are understood.
- Custody
A signature quorum changes what one theft or loss can do
Bitcoin's own developer guide and two BIPs define what an m-of-n threshold enforces, and what it leaves to the people holding the keys.
- Custody
A Merkle-tree reserve proof shows assets, not liabilities
Kraken's and Binance's own proof-of-reserves pages describe what a Merkle-tree check verifies, and where each stops short of solvency.
Explore the topic
- Custody / NEW PRACTICAL GUIDE
A watch-only wallet removes spending power, not privacy risk
A practical workflow for monitoring cold storage without handing every address and balance to an avoidable observer.
- Custody / NEW PRACTICAL GUIDE
Rehearse wallet recovery without turning the seed into a test input
A recovery drill should prove the backup while keeping its most dangerous secret off ordinary computers and websites.
- Custody / NEW PRACTICAL GUIDE
A seed backup may recover keys and still miss the wallet
Output descriptors preserve the script, path and account context that makes a set of keys usable across wallet software.
- Custody / NEW PRACTICAL GUIDE
Verify a receive address on the screen that holds the keys
Copying an address from a wallet app is not the same as proving that the signing device controls it.
- Custody / NEW PRACTICAL GUIDE
An exchange withdrawal needs an asset, a network and a destination
Matching the ticker and address is not enough when an exchange offers several settlement networks for one asset.
- Custody / NEW PRACTICAL GUIDE
An inheritance plan should locate the secret without becoming it
Separate legal authority, operating instructions and spending credentials so one lost envelope or curious reader cannot do everything.
- Custody / NEW PRACTICAL GUIDE
Treat a hardware-wallet update as a provenance decision
Version numbers matter less than source, model compatibility, signed release evidence and a verified recovery path.
- Custody / NEW PRACTICAL GUIDE
Review a token allowance before signing it
Identify the spender, ceiling, duration and revocation path before an approval becomes durable authority.
- Custody / NEW PRACTICAL GUIDE
Read a security audit for scope, version and exclusions
Match a report to deployed code and unresolved findings before treating the audit badge as relevant evidence.
- Custody / NEW PRACTICAL GUIDE
Evaluate a bug-bounty disclosure policy without exploiting anything
Judge scope, authorization, reporting and payout terms from published policy evidence—without probing live systems.
- Custody / NEW PRACTICAL GUIDE
Distinguish native and bridged stablecoin contracts
Use chain, contract and redemption path to tell look-alike stablecoins apart before a transfer.
- Custody / NEW PRACTICAL GUIDE
Set payment budgets and authorization controls for an AI agent
Put deterministic limits between model output and wallet execution, then design revocation and reconciliation before funding.
- Custody
Custody is a separate question.
Identify who can authorize a transfer, and what happens if access fails.
- Custody
BIP16 let a recipient set spending terms, not the sender
Pay-to-script-hash moved custody conditions like multisignature into the protocol itself, activating in April 2012.
- Custody
A timelock refuses to spend early, it cannot force spending
BIP65 and BIP112 let a script wait on a date or an output's age, useful for custody but not a full plan.
- Custody
PSBT lets one machine build and another sign, separately
BIP174 standardised a transfer format between construction and signing, moving risk to that transfer step.
- Custody
A reused address links payments a CoinJoin cannot unlink
The 2013 CoinJoin proposal breaks input-output linkage but never hid the network layer alone.
- Custody
A Silk Road seizure shows custody is control of keys
Federal filings on the Silk Road case record how prosecutors took custody of bitcoin and what happened to the network afterward.
- Custody
MtGox's 2014 collapse was a company failure, not a protocol one
MtGox's own February 2014 filing disclosed missing bitcoins and opened a rehabilitation case that took a decade to begin repaying creditors.
- Custody
A public ledger let a 2016 theft be traced six years later
DOJ and ICE records trace 119,754 bitcoin stolen from Bitfinex in 2016 to a 2022 arrest and a multibillion-dollar seizure.
- Custody
A regulator's review found the cold-storage claims were false
The OSC found Quadriga's founder secretly traded against clients and that customer coins were not held where the exchange said they were.
- Custody
A shared library's deletion froze wallets it did not own
A single deleted contract library disabled every Parity multi-signature wallet deployed after July 2017, freezing the ether inside them.
- Custody
A bankruptcy court read the terms and the coins were not yours
A judge found Celsius's Terms of Use gave the company title to Earn account coins, leaving depositors as unsecured creditors.
- Custody
A listed exchange disclosed that custody is not a promise
Coinbase's own quarterly filing warned custodial crypto could become bankruptcy estate property, leaving customers as unsecured creditors.
- Custody
An exchange balance turned out to be a claim on a company
SEC and DOJ records describe customer deposits diverted from FTX to Alameda Research, ending in bankruptcy and a 25-year sentence.
- Custody
The largest exchange admitted compliance failures at scale
Treasury and CFTC settlements record Binance's guilty plea to anti-money-laundering and sanctions violations in a $4.3 billion resolution.
- Custody
The Bybit theft altered what signers saw, not the cryptography
An FBI notice and Safe's own statement date a $1.5 billion theft to a compromised signing interface, not a broken key.
- Custody
A Merkle-tree reserve proof shows assets, not liabilities
Kraken's and Binance's own proof-of-reserves pages describe what a Merkle-tree check verifies, and where each stops short of solvency.
- Custody
A stablecoin attestation is not an audit
Circle and Tether both describe attestations against a named standard, and neither claims to have delivered a full financial audit of reserves.
- Custody
A wrapped bitcoin is a claim on a custodian, not bitcoin
WBTC's own site names the custodial and merchant structure that a holder of the token is actually relying on.
- Custody
A phone number is an authentication factor a carrier holds
An FBI advisory and a new FCC rule date how far SIM-swap losses grew and what carriers must now do about it.
- Custody
Reported crypto fraud losses cluster in investment schemes
The FBI's 2023 report ties most reported cryptocurrency losses to confidence-based investment fraud, not protocol failures.
- Custody
A signature quorum changes what one theft or loss can do
Bitcoin's own developer guide and two BIPs define what an m-of-n threshold enforces, and what it leaves to the people holding the keys.
- Custody
A wallet backup is a recovery plan
A seed can simplify key recovery, but only if the actual wallet, settings, and secrets are understood.