Blockchain protection company Coincover has launched ‘Protected Co-Signing’ which adds an additional layer of protection to reduce the risks during digital asset transactions.
The new service adds to the existing co-signing model within digital asset custody. While the emergence of multi-sig wallets allowed different parties to share custody and reduce risk of loss from disaster scenarios, the addition of Coincover’s proprietary technology into the co-signing model further reduces the risk of transacting digital assets.
Working with its partner Onramp, Coincover’s implementation of the technology will automatically screen transactions for any security risks, such as cases of fraud or hacking.
Furthermore, the solution also provides a failsafe by applying Coincover’s insurance-backed warranty to transactions, providing a secure way to sign transactions.
Alex Saleh, Head of Partnerships at Coincover, said: “This is another step forward in the evolution of digital asset custody. As transactions have developed over the years, certain industry pioneers have created ways to make cryptocurrencies safer to hold and transact.
“Now, we’re taking this to the next level. Our aim is to encourage greater trust in digital assets at the institutional level and protected co-signing provides the ultimate layer of protection so that – even if something goes wrong – there is a safety net, allowing institutions to engage with cryptocurrencies with confidence.”
Cryptocurrency transactions have continually increased over the last several years, becoming an increasingly viable payment solution. However, the proliferation of these transactions has also opened itself up to a flurry of fraudsters and scammers.
In the most recent Chainalysis crypto crime report, the blockchain analysis firm found that up to $24.2bn worth of crypto was lost as part of fraudulent crime last year. Despite this dropping by 39% from 2022’s $39.6bn, Chainalysis also uncovered new tactics being used by fraudsters in the crypto space.
The unique properties of private keys used in the signing of cryptocurrency transactions mean that there are risks involved in digital asset custody that can lead to funds being lost forever. Custody models which trust a single entity to sign transactions, such as single-institution custody or self-custody, can result in a single point of failure.
Onramp is the first Coincover partner to bring this offering to the market, ensuring that customers benefit from extra layers of security. The solution is available to all custody platforms that use key material distributed between multiple entities to sign transactions.
Michael Tanguma, Co-Founder & CEO at Onramp, added: “Multi-institution custody is exciting because we believe it unlocks trillions of dollars in capital that has historically been waiting on the side-lines to get exposure to the best performing asset of the last decade.
“By incorporating fault tolerance and redundancies via multiple world class institutions, clients can now get exposure to bitcoin and not risk their investment going to zero if they choose the wrong counterparty.
“Protected Co-Signing is the next evolution of multi-institution custody, by incorporating additional assurances by way of Coincover’s proprietary risk engine, key signing, and Lloyd’s of London relationship, we can now layer in insurance to the already best in class enterprise custodiol solution.”
