​Cregis Research: Large-scale centralized asset custody crisis may be coming

Recently, there has been a surprising piece of news in the cryptocurrency space. Bitcoin Magazine; CEO; David Bailey; posted a thought-provoking tweet on social media; Twitter; he wrote: "Major custodian about to declare bankruptcy without last minute bailout. Take your Bitcoin off exchanges , even bitcoin only platforms.” (Large custodians are about to declare bankruptcy unless there is a last-minute bailout. Take your bitcoins out of exchanges, even bitcoin-only platforms.)

（David Bailey‘s tweets）

This tweet undoubtedly hinted at a frightening thing: there may be serious risks in mainstream custodians, and the security of assets is worrying. Netizens speculated whether David's warning implied "Fireblocks" and "Prime Trust", two hosting companies with important influence in the industry.

(Netizens guess prime trust)

A netizen said that swan;'s assets were transferred from "prime trust" to "Fortress" and "Bitgo, swan;" CEO Cory klippsten; Bitgo; custodial, they recommend self-custodial assets as always.

(swan ceo recommends asset self-custody)

Later, we also saw the upgrade announcement on swan;'s official website, and the custodian of Swan customer assets has changed. All Swan clients' BTC and USD are hosted by Fortress; and Bitgo;

(Swan Bitcoin; Upgrade Announcement)

In this centralized hosting dilemma, are your assets still safe?

Traditionally, centralized custodians have been seen as a guarantee of asset security, and they are responsible for storing and protecting users' cryptocurrencies. However, when these centralized institutions have problems, such as bankruptcy or internal management problems, users' asset security will face serious threats. Users cannot control their own private keys, so they cannot fully control their own assets, and this risk is greatly magnified.

At this time, self-hosted encrypted wallets are extremely important. Self-custodial wallets not only allow users to fully control their own private keys, but also ensure the safety of assets under any circumstances. It gives users complete control, thereby eliminating the risk of problems due to centralized custodians.

So, how to choose a safe and reliable self-hosted wallet?

1. cregis; how to deal with the hosting party's thunderstorm?

Cregis; digital asset self-custody wallet, utilizes the latest secure multi-party computation (MPC) and self-custody (self-custody) shard management strategy to ensure the security of user assets, and truly realizes the self-custody of encrypted assets. Our users are in complete control of their own key shards and thus have complete control over their assets. Even in the worst-case scenario, such as the custodian company bankruptcy mentioned in David Bailey's warning today, users' assets are still safe.

2. Cregis; How to deal with hacker attacks?

Using mpc; an added benefit of self-hosted wallets is that even if hackers somehow managed to break into a single MPC node, they would have no way of knowing the value of the collective output of all nodes. In order to take control of wallets secured by MPC, they would theoretically need to simultaneously launch an attack on the total number of devices required to sign transactions.

For example, if the number of shards is 10; and the threshold required to sign a transaction is 5;, then an attacker would need to break into more than 5; storage locations and steal key shards. Active security measures, such as key rotation that automatically moves updated sensitive private key material between nodes, make this more difficult. At present, Cregis; is using this kind of measure. Users can update the new shard by resetting the shard, thereby improving the safety factor.

Assuming MPC is implemented on secure hardware, this simultaneous attack on multiple fronts makes MPC more secure than other private key storage methods such as hot and cold wallets with a single point of failure. In addition, the flexible governance supported by MPC reduces the possibility of "inner ghosts" accessing wallets and taking assets away.

3, cregis; how to prevent physical attacks and software vulnerabilities?

Cregis combines SGX, TrustZone, and Nitro; three trusted execution environments (TEEs) to build a comprehensive encrypted isolation environment, which is separated from external memory and can effectively reduce related security risks. When the transaction is signed, multiple shards are calculated in TEE; to realize the isolation and protection of the core link of the transaction. Therefore, "cregis" users' assets are difficult to be lost due to third-party malicious behavior.

Not only that, Cregis; also has been actively responding to the challenges of the industry. Our team is constantly researching changes in the market, looking for the latest technologies to provide the safest and most convenient cryptocurrency self-custody solutions. In this ever-changing crypto world, let's make smarter decisions for the security of our assets.

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