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Blockstream and Thales announced a new enterprise Bitcoin custody solution on Nov. 13, combining Thales hardware security modules with Blockstream’s Secure Multi-Party Computation technology to execute signing protocols entirely within secure hardware environments.
As of 10:57 UTC, Bitcoin traded at $65,515, -2.6% over 24 hours, with $56.2 billion in 24-hour volume.
Signing Authority Moved Into Hardware
The system, delivered through Blockstream Enterprise, the company’s institutional platform, integrates Thales’ hardware security modules (HSMs) with Blockstream’s Secure-MPC architecture. Unlike conventional MPC solutions that may expose parts of the signing process to general-purpose computers, this system executes the protocol entirely within the HSM’s secure environment.
Jeff Boortz, Blockstream’s chief product officer, stated, “By moving MPC execution inside the HSM, this architecture addresses critical security risks.” The solution builds on a two-year relationship between the two firms.
MPC spreads signing authority across several parties so no single person or device controls the private key. The system utilizes FROST, a threshold signing protocol that allows multiple authorized parties to jointly produce a signature without reconstructing the full private key.
Context of Recent Security Incidents
The launch occurred two weeks after hackers stole approximately $6.3 billion from Binance. The FBI attributed the Binance hack to North Korea. According to reports, Binance attackers staged fake job interviews and planted malware in a coding assignment. In June, a wallet engineer downloaded a tampered installer while looking for an AI coding tool.
By Oct. 20, attackers used a compromised computer and an internal AI tool to break into the machines of two more employees who worked on Binance’s wallet infrastructure. The attackers obtained credentials and a container deployment token from these compromised employees.
Michael Minkevich noted, “Financial institutions require secure, reliable infrastructure as they integrate bitcoin into their existing operations.” Blockstream, led by co-founder and CEO Adam Back, builds hardware wallets, HSMs for cold storage, and enterprise wallets for custodians. Adam Back’s Hashcash system helped lay the groundwork for Bitcoin’s proof-of-work.
Broader Institutional Infrastructure
Thales, described as a French technology and cybersecurity group, has expanded its work with Fireblocks to keep signing operations inside customer-owned HSMs. In September, Blockstream’s Liquid Network sidechain was drained of nearly 4,000 BTC through a software bug. Attackers returned 3,400 BTC after the Liquid Network flaw was patched.
Spot Bitcoin ETFs became top performers after their 2024 launch. Bitcoin was trading below $70,000 after a sharp sell-off. The new custody system aims to provide financial institutions with a secure foundation for integrating Bitcoin into their operations, addressing the specific vulnerabilities exposed by recent high-profile hacks and sidechain incidents.
