What Is a ‘Multi-Signature Wallet’ and Its Purpose in Institutional Crypto Custody?

A multi-signature (multi-sig) wallet requires multiple private keys (signatures) to authorize a transaction, rather than just one. For institutional custody, this serves as a robust security measure.

It prevents a single point of failure ▴ no single person can unilaterally access or move the funds. It distributes control among several authorized parties, requiring consensus for any transaction, which significantly reduces the risk of internal theft or accidental loss.