What Is “Key Management” and Why Is It Central to Crypto Custody Risk?
Key management is the practice of securely generating, storing, backing up, and using the private keys that control access to a cryptocurrency wallet. It is central to custody risk because anyone who possesses the private key can access and spend the associated funds.
A failure in key management, such as losing the key or having it stolen, results in the permanent loss of the crypto assets.
Glossar
Private Keys
Ownership ⎊ Private Keys are the secret cryptographic credentials that mathematically prove ownership and grant exclusive control over associated cryptocurrency addresses and the assets they secure.
Hardware Security Modules
Protection ⎊ Hardware Security Modules are specialized, tamper-resistant physical computing devices used to securely generate, store, and manage cryptographic keys, providing the highest level of assurance for asset custody in crypto operations.
Key Management
Custody ⎊ Key Management within cryptocurrency, options trading, and financial derivatives represents the secure control and safeguarding of private keys, critical for authorizing transactions and maintaining asset ownership.