Digital Asset Custody Solutions for Regulated Enterprises

Institutional digital asset custody is a key management and authorization problem. The question regulators, auditors, and risk teams ask is: can you demonstrate who could have signed, under which policy, with which approvals, and with which controls, while preventing single-point compromise?

The custody market grew from $708 billion to an estimated $834 billion in 2026, at a compound annual growth rate of 17.8%, with institutional investors, asset managers, and banks driving the expansion. MPC-based key management has become the dominant architecture for new institutional deployments, with over 70% of new institutional crypto products launching with MPC-first architecture.

This guide covers the three custody models, profiles the leading platforms, and explains where infrastructure-level MPC fits for institutions that need control over their own key management.

Three Custody Models

Self-Custody

The institution holds and manages all private keys directly. No third party has access to signing authority. This model offers maximum control but requires the institution to build and maintain its own security infrastructure, key management procedures, and disaster recovery.

Self-custody is the standard approach for banks, large asset managers, and regulated custodians who cannot delegate key control to a third party under their regulatory framework. The challenge is that building institutional-grade key management from scratch requires deep cryptographic engineering capability and ongoing security maintenance.

Third-Party Custody

The institution delegates key management to a qualified custodian. Platforms like Coinbase Custody, Fidelity Digital Assets, and Anchorage Digital operate as third-party custodians, holding assets on behalf of clients under regulatory frameworks such as the OCC national bank charter or NYDFS trust company license.

Third-party custody reduces operational burden but introduces counterparty risk. The 2022 FTX collapse and the 2025 Bybit breach ($1.5 billion lost from a single wallet compromise) demonstrated that counterparty failure in custody is a systemic risk, not a theoretical one.

Hybrid MPC Custody

Hybrid custody uses multi-party computation to distribute key shares across the institution and one or more infrastructure providers. No single party holds the complete private key at any point. The threshold signature scheme produces a standard on-chain signature, so the custody architecture is invisible to the blockchain.

This is the dominant model for new institutional deployments. Fireblocks, Copper, and BitGo all operate variations of this architecture. The critical distinction is whether the institution controls its own key shares and infrastructure, or depends entirely on the platform vendor's servers.

The Architecture Decision: Platform vs Infrastructure

The most consequential choice in institutional custody is not which MPC protocol to use. It is whether to use a managed custody platform or to deploy MPC infrastructure inside your own environment.

Managed Custody Platforms

Platforms like Fireblocks, Copper, and Cobo provide end-to-end custody services. The institution accesses custody through APIs and dashboards. Key shares are generated and managed by the platform's infrastructure. The institution trusts the platform's security, policy engine, and operational controls.

This model works well for funds, trading firms, and fintechs that want custody as a service. It is fast to deploy and requires minimal cryptographic engineering capability from the institution.

The tradeoff is dependency. The institution cannot independently verify the cryptographic operations happening inside the platform's infrastructure. Key shares exist on the platform's servers. If the platform is compromised, restructured, or goes offline, the institution's operational continuity depends on the platform's recovery procedures.

MPC Infrastructure SDKs

The alternative is deploying MPC infrastructure directly inside the institution's own environment. The institution controls key generation, shard placement, policy enforcement, and signing operations. The MPC vendor provides the cryptographic library and SDK, but the institution operates its own infrastructure.

This model is appropriate for banks, regulated custodians, and any institution where regulatory requirements mandate that key material never leaves the institution's control. It requires more upfront engineering but provides full operational sovereignty.

Silent Shard from Silence Laboratories is built specifically for this model. It is an on-premises MPC-TSS SDK that institutions deploy inside their own trusted environments. The institution controls network segmentation, privileged access management, SIEM integration, change management, and audit evidence collection. The complete codebase is accessible to client security teams for independent review.

Platform Profiles

Fireblocks

Fireblocks is the most widely adopted institutional digital asset infrastructure platform. It uses MPC to distribute key shares across nodes and supports a transfer network connecting exchanges, counterparties, and DeFi protocols. Fireblocks reports over $4 trillion in cumulative transfer volume across approximately 1,800 institutional clients. Fireblocks Trust Company holds a NYDFS trust charter.

Fireblocks is a managed platform. The institution accesses custody through Fireblocks' infrastructure. The platform's policy engine processes conditional logic across 30+ parameters for automated approvals. SOC 2 Type II attestation is reported as current.

Best for: Trading firms, funds, and fintechs needing fast deployment with broad network connectivity. Institutions comfortable with platform-managed key shares.

BitGo

BitGo pioneered institutional Bitcoin custody with multi-signature architecture in 2013. BitGo received OCC national bank charter approval in December 2025 and filed for a $200 million NYSE IPO in January 2026. Assets under custody crossed $90 billion in mid-2025. BitGo expanded its regulatory footprint with MiCA-compliant licenses in Germany and broker-dealer approval in Dubai.

BitGo uses both multi-signature and MPC key management. BitGo deployed Silent Shard from Silence Laboratories for its MPC custody infrastructure, choosing the DKLs23 protocol for its structural safety advantages over Paillier-based alternatives. BitGo also completed the first post-quantum MPC transaction simulation by a regulated custodian using Silence Laboratories technology.

Best for: Institutions requiring a federally chartered qualified custodian with both multi-signature and MPC options. Strong for Bitcoin-focused strategies.

Anchorage Digital

Anchorage Digital Bank is the first federally chartered crypto bank, holding an OCC national trust charter since January 2021. Its custody platform uses secure enclave hardware (HSM, TEE) with staking, governance, and custody-as-a-service. Anchorage is selective about onboarding and the integration timeline can be longer than infrastructure-only platforms.

Best for: U.S.-regulated institutions requiring a federally chartered qualified custodian with the clearest regulatory status in the market.

Copper

Copper built its custody around MPC technology with ClearLoop, an off-exchange settlement network that lets institutional clients trade on exchanges without moving assets out of custody. One MPC key share is kept offline, strengthening the cold-storage profile. SOC 2 Type II is reported as in place.

Best for: Trading-active institutions that need custody integrated with prime brokerage and off-exchange settlement.

Cobo

Cobo is a Singapore-based custody technology provider offering MPC wallet-as-a-service (WaaS) for institutional clients. Cobo supports both self-custody and managed custody models with hot, warm, and cold vault configurations.

Best for: APAC-based institutions and fintechs building custody into their own products through WaaS APIs.

DFNS

DFNS provides wallets-as-a-service through an MPC-based API, with strong developer experience for embedded wallets in fintech applications. SOC 2 Type II is reported as in place. DFNS is developer-first, with emphasis on API-driven integration rather than full custody service.

Best for: Fintechs and product teams building embedded wallet experiences. Developer-first architecture.

Where Silent Shard Fits: The Infrastructure Layer

Silence Laboratories does not operate a custody platform. It provides the MPC infrastructure that institutions and custody platforms deploy inside their own environments.

Silent Shard is an MPC-TSS SDK implementing the DKLs23 protocol. The protocol was co-invented by Yashvanth Kondi, VP Cryptography at Silence Laboratories, and published at IEEE S&P 2024, one of the most selective venues in security research. The team that designed the protocol is the team that builds and maintains the production library.

Why DKLs23

Not all MPC protocols offer the same security guarantees. Earlier protocols using Paillier-based cryptography (GG18, GG20, CGGMP) have suffered critical vulnerabilities. The BitForge and TSSHOCK vulnerability disclosures affected 15+ wallet providers running Paillier-based implementations.

DKLs23 uses oblivious transfer (OT) instead of Paillier cryptography, eliminating that entire vulnerability class. Trail of Bits concluded that OT-based systems are "generally less error-prone than Paillier-based systems" after auditing TSS implementations across protocol families.

DKLs23 now powers custody infrastructure at BitGo (by Silence Laboratories), Copper.co, Utila, and Vultisig, with earlier DKLs variants in production at Visa and Coinbase. It is the most widely adopted next-generation threshold signing protocol in the industry. ⚠️ Flag for Yashvanth: please confirm the DKLs23 adoption list (Copper, Utila, Vultisig, Visa, Coinbase) is accurate and approved for public use before publishing.

Production Deployments

BitGo chose Silent Shard for institutional custody, deploying DKLs23 inside its infrastructure.

Okto (CoinDCX) uses Silent Shard across 17 million wallets for consumer wallet security.

Easy Crypto, New Zealand's largest crypto retailer, uses Silent Shard for wallet security.

MetaMask (ConsenSys) uses the L17 protocol implementation for its Snap integration. ⚠️ Flag for Berd: verify MetaMask Snap is still live before publishing.

Technical Capabilities

Signatures in under 20ms. Silent Shard performs distributed signatures in under 20ms, one of the fastest MPC-TSS implementations available in production.

On-premises deployment. The SDK runs inside the institution's trusted environment. Key material never leaves the institution's infrastructure perimeter.

Open-source codebase. The DKLs23 implementation and core crypto primitives are open source under permissive license, enabling independent verification by security teams without NDA barriers.

8 independent audits across 4 firms. Trail of Bits, Cure53, HashCloak, and Secfault have conducted security assessments of the Silent Shard codebase. ⚠️ Flag for Jay: confirm audit count and firms are accurate.

Vendor/protocol migration. Silent Shard includes a built-in migration protocol that cryptographically converts key shares from other MPC-TSS protocols (GG18, GG20, CMP, or any other) into DKLs23-based wallets, without changing wallet addresses and without downtime. ⚠️ Flag for Yashvanth: confirm migration protocol is publicly announced.

Any {t,n} topology. Silent Shard supports self-custody through shared custody through designated custody, and any threshold configuration, enabling institutions to separate duties across departments, sites, and external recovery agents.

Comparison Table: Institutional Digital Asset Custody

Evaluation Framework for Institutional Buyers

1. Regulatory structure. Does your regulatory framework require qualified custodian status? If yes, the field narrows to BitGo, Anchorage, Coinbase Custody, and Fidelity Digital Assets. If your institution is the custodian and needs to self-custody, you need infrastructure (Silent Shard) rather than a managed platform.

2. Key control. Who generates and holds key shares? If your risk committee requires that key material never leaves your infrastructure, managed platforms are excluded. On-premises MPC infrastructure (Silent Shard) or hardware-backed self-custody are the options.

3. Protocol security. Which MPC protocol does the platform use, and has it been independently audited? Ask for the specific protocol name (DKLs23, CGGMP, GG20, proprietary), the audit firm, and whether findings were published. Paillier-based protocols have a documented vulnerability history (BitForge, TSSHOCK).

4. Operational flexibility. Can you rotate signers, update quorum thresholds, or replace compromised devices without changing wallet addresses or migrating assets? MPC with key refresh capabilities (like Silent Shard) supports this. Multi-signature and some older MPC implementations do not.

5. Post-quantum readiness. NIST finalized post-quantum standards with classical algorithm deprecation scheduled for 2030. Custody infrastructure built today will need to support post-quantum signatures within the decade. Silence Laboratories offers Post Quantum MPC, post-quantum MPC wallet infrastructure. BitGo completed the first post-quantum MPC transaction simulation by a regulated custodian in collaboration with Silence Laboratories.

6. Vendor lock-in. Can you migrate key shares to a different MPC protocol or vendor without a re-keying ceremony? Silent Shard's migration protocol supports bi-directional migration between MPC implementations. Few other providers offer this.

Compliance and Regulatory Context

OCC National Bank/Trust Charters. BitGo (December 2025) and Anchorage (January 2021) hold OCC charters, providing the clearest qualified-custodian status under U.S. law. The OCC charter was reinforced after SAB 121 was repealed in 2025, removing accounting barriers for banks offering crypto custody.

NYDFS Trust Companies. Fireblocks Trust Company and Coinbase Custody operate under NYDFS trust charters. These provide qualified-custodian status for clients subject to SEC custody rule requirements.

MiCA (EU). The Markets in Crypto-Assets Regulation requires custody providers operating in the EU to obtain CASP (Crypto-Asset Service Provider) authorization. BitGo holds MiCA-compliant licenses in Germany.

MAS (Singapore). The Monetary Authority of Singapore's Technology Risk Management guidelines require robust key management and data processing controls. Silence Laboratories, headquartered in Singapore, builds Silent Shard for deployment environments subject to MAS oversight.

SOC 2 Type II. The baseline audit standard for managed custody platforms. Fireblocks, BitGo, Copper, and DFNS report current SOC 2 Type II attestations. On-premises SDK deployments (Silent Shard) fall under the deploying institution's own SOC 2 program.

Related Reading

• MPC vs Multisig: Key Management Architecture

• Best MPC Wallet SDK for Developers

• The MPC Custody Landscape

• Post Quantum MPC

• Silent Shard Product

• BitGo Customer Story

• Okto Customer Story

• Silent Shard Documentation

FAQ

What is the difference between a custody platform and MPC infrastructure? A custody platform (Fireblocks, Copper) provides end-to-end managed custody as a service. The institution accesses custody through the platform's APIs and dashboards, and key shares are managed by the platform's infrastructure. MPC infrastructure (Silent Shard) is a cryptographic SDK that the institution deploys inside its own environment. The institution controls all key material and signing operations directly.

Why did BitGo choose Silent Shard? BitGo deployed Silent Shard's DKLs23 implementation for its MPC custody infrastructure. The DKLs23 protocol uses oblivious transfer instead of Paillier cryptography, eliminating the vulnerability class that affected 15+ wallet providers through BitForge and TSSHOCK. BitGo also completed the first post-quantum MPC transaction simulation using Silence Laboratories technology.

Is MPC custody safer than multi-signature custody? MPC eliminates full-key exposure because no complete private key ever exists in any single location. In a multisig arrangement, each signer holds a complete key. A compromised signer in a multisig still holds a valid key. A compromised share in an MPC system cannot produce a signature on its own. See the MPC vs Multisig comparison for the full analysis.

How do I evaluate the security of an MPC custody provider? Ask for the specific protocol name, request published audit reports (not summaries), verify whether the audit firm published their findings independently, and check whether the protocol has a documented vulnerability history. DKLs23 has no known structural vulnerabilities. Paillier-based protocols (GG18, GG20, CGGMP) have been affected by BitForge and TSSHOCK.

What is post-quantum custody? Standard ECDSA and Schnorr signatures used in today's custody infrastructure are vulnerable to quantum computing attacks via Shor's algorithm. Post-quantum custody uses signature schemes that remain secure against quantum computers. NIST has finalized standards (ML-DSA / FIPS 204) with classical algorithm deprecation by 2030. Silence Laboratories offers Post Quantum MPC for institutions beginning the migration.