Multi-Institution Custody Explained

Multi-institution custody is the practice of distributing your Bitcoin across multiple independent, regulated custodians rather than trusting a single entity. It emerged as a direct response to catastrophic single-custodian failures.

The Problem with Single Custodians

When all your Bitcoin sits with one custodian, you face concentrated risk. If that custodian is hacked, goes bankrupt, freezes withdrawals, or is seized by regulators, you could lose everything. FTX held billions in customer assets — all gone overnight.

How Multi-Institution Custody Works

Instead of depositing everything with one provider, multi-institution custody distributes your assets across multiple independent custodians. If one fails, the others remain unaffected. This is the same principle behind diversification in traditional finance.

Key Benefits

• No single point of failure — One custodian compromised doesn't mean total loss
• Aggregated insurance — Combined coverage across custodians exceeds any single policy
• Regulatory diversification — Multiple regulated entities across jurisdictions
• Reduced counterparty risk — No single entity controls all your Bitcoin

Who Should Consider It

Multi-institution custody is ideal for family offices, institutions, RIAs, and high-net-worth individuals who cannot afford single-custodian risk. If you have over $100K in Bitcoin, the added resilience is worth considering.