Introduction
A digital asset custody system provides secure storage and controlled access to cryptographic assets such as cryptocurrencies (e.g., Bitcoin, Ethereum, Ripple). This system is particularly valuable for institutional clients requiring high-security solutions for managing large volumes of digital assets under custodial arrangements.
Key Components
Multi-Layer Security Architecture
- Biometric multi-user authentication
- Transaction risk analysis
- Hardware Security Modules (HSMs) for secure key storage
System Components
- Online server subsystem
- Relay server (virtual air gap)
- Risk analysis module
- HSM with internal secure storage
- Data storage facilities
Workflow
Asset Deposit Process
- Client initiates deposit via dedicated application
- System generates new public/private key pair unique to the deposit
- Blockchain address is created from the public key
- Signed blockchain address is returned to client
- Client completes transaction to the generated address
- System confirms and notifies client upon blockchain confirmation
Asset Withdrawal Process
- Authorized user initiates withdrawal request
- Endorsement requests are sent to designated approvers
- Each approver authenticates via biometric verification
- System verifies quorum of approvals is met
- Risk analysis stage evaluates transaction
- HSM signs approved transaction using custodial private key
- Transaction is submitted to blockchain network
Security Features
- Dual Biometric Authentication: Combines multiple biometric verification methods (fingerprint, facial recognition, voice verification)
- Threshold Authorization: Requires predefined quorum of authorized approvals per transaction
- Offline Endorsement: Supports authorization via air-gapped devices
- Risk-Based Controls: Automated and manual risk assessment layers
Technical Specifications
HSM Operations:
- Private key generation and secure storage
- Transaction signing authorization
- Quorum requirement verification
User Authentication:
- Device-secured private keys
- Deterministic challenge protocols
- Video-based identity confirmation
Compliance and Audit
- Ownership Verification: Proof of control via cryptographic signatures
- Immutable Logging: All authorization decisions recorded in append-only ledger
- Regulatory Alignment: Designed to meet institutional custody requirements
Frequently Asked Questions
Q: How does the system ensure private key security?
A: Private keys are generated and stored exclusively within HSMs, with no external access permitted.
Q: What happens if authorization quorum isn't met?
A: Transactions remain pending until sufficient authorized approvals are received or time out.
Q: How are transaction risks evaluated?
A: Through automated risk scoring algorithms and optional manual review by custodial staff.
Q: Can the system support staking operations?
A: Yes, the architecture includes proof-of-stake blockchain support capabilities.
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