Coincover creates a new security protocol: protected co-signing

Coincover is gearing up to introduce an additional layer of security for crypto custody to prevent the risk of scams or hacking. The blockchain security company has just announced a new partnership with Onramp for the launch of the new "Protected Co-Signing" service.

This new service adds an extra level of security to the existing co-signing model to raise the bar for digital asset custody protection. Coincover's solution complements the widely adopted practice of multi-sig, which involves sharing custody of wallets containing keys for accessing crypto assets with other users.

Coincover Introduces a New Level of Security for Crypto Custody

On April 18th, Coincover announced its collaboration with the Bitcoin wealth management platform Onramp, which facilitated the launch of the cybersecurity product Protected Co-Signing.

The purpose of co-signing is to elevate the level of protection during transactions involving digital assets. It builds upon the established practice of sharing signature responsibilities with multiple parties to access wallets and conduct transactions, as seen in the multi-sig wallet protection system.

The technology developed by Coincover introduces an additional layer of security to co-signing for transaction validation, thus preventing unauthorized operations due to hacking attacks or scams.

Protected Co-Signing was developed in partnership with the Bitcoin wealth management platform Onramp. This service is available for all token custody platforms that employ multiple keys distributed among different entities to validate signatures and authorize transactions.

In a press release from the company, Alex Saleh, Coincover's Head of Partnerships, explained:

"Over the years, thanks to the development of effective transaction methods, some industry innovators have created systems to make cryptocurrencies safer to hold and exchange. Now we're taking this to the next level. Our goal is to foster greater institutional confidence in digital assets, and Protected Co-Signing provides the highest level of protection so that even if something goes wrong, there's a safety net that allows institutions to interact with cryptocurrencies confidently."

It is important to note that there are various mechanisms for safeguarding crypto, and not all ensure the same level of security. Individuals usually rely on self-custody, where they personally ensure the safekeeping of keys for wallet access.

In the case of institutions and entities holding large sums in wallets, it is common to distribute keys among multiple entities so that no single entity can access the credentials to access the funds and withdraw them. This means that to breach such an account, it is necessary to obtain multiple pieces of code to reconstruct the puzzle that allows for transaction execution, for example, by stealing the capital.

Raising the Level of Security to Facilitate Entry for Wealth Managers

It's not surprising that Coincover's first partner in this initiative is an entity that specializes in crypto custody for institutional clients, Onramp. Michael Tanguma, co-founder, and CEO of Onramp, emphasized the real scope of the innovation. By raising the security level, the first respondents will be institutional players who have so far stayed on the sidelines due to the high risk posed by security vulnerabilities. This could "unlock trillions of dollars that have so far remained on the sidelines, which will want exposure to the best-performing assets of recent years."

Protected Co-Signing is thus the next level of evolution for multi-entity custody, and therefore multi-sig. Another significant aspect is that Coincover collaborates with the Lloyd's of London insurance institute, adding an additional layer of protection, perfect for reassuring institutional investors.

Crypto Crime Never Sleeps

According to the latest report from the blockchain analysis company Chainalysis, despite the increased use of Bitcoin, the risk level associated with custody and the resulting loss of crypto assets remains high. Scams and hacking attacks are still a real and much more serious problem than transactions in fiat currency. According to data collected by Chainalysis, in 2023 alone, cryptocurrencies worth $24.2 billion were stolen, particularly due to ransomware attacks.