Perspectives

Put out the fire, block human errors and be in full control of your private keys

June 24, 2021 - 3 min read

A couple of recent events in the digital asset industry showed again that human errors easily lead to the loss of significant amounts of bitcoins (69,000 BTC) and ethers (38,178 ETH). It is critical for professional digital asset investors and financial institutions to be reminded how the real ownership and secure management of private keys is tied to the strict ability to set up and enforce secure governance rules: who has access to the keys, when, and how. More importantly, those institutions and professionals need to be able to recover their digital assets without having to rely on the intervention of a third-party service provider.

I. Not your governance, not your coins

In the cryptocurrency world, whoever owns the private keys, effectively owns the assets. The lack of ability to customize governance rules and the incapacity to securely enforce them are the most critical challenges investors and financial institutions face in the digital asset management space.

Guaranteeing the secure storage of private keys from a technical angle only matters if those keys are in the hands of the rightful owner(s) at all times. To prevent them from being exposed to external (hacking attacks) and insider threats (rogue trading, malicious operators) or human errors, digital asset investors and financial institutions must rely on inviolable governance rules. This will ultimately provide them with state-of-the-art control functions over the digital assets and ensure full segregation of duty between operators and private key owners.

Without fully customizable management workflows included in governance rules frameworks, organizations and financial institutions have their hands tied and become susceptible to both insider and external threats.

II. Ledger Vault: the ultimate governance rules engine

As an enterprise-grade solution, Ledger Vault provides organizations and financial institutions with the ability to fully customize their governance and spending rules, which are then enforced in a secure hardware environment (Hardware Security Module), preventing external attacks and malicious behaviors or human errors.

The governance rules are flexible and can be tailored to the organization’s requirements, depending on its structure and size. That way, you can totally mitigate operational risks and empower a more agile and safe governance infrastructure.

With Ledger Vault, organizations retain complete ownership and management of their clients’ private keys through personal security devices (PSDs). Ledger or Ledger’s employees never have access to the private keys and therefore are never in a position to lose or steal the underlying assets.

III. The Ultimate Private Key Recovery Process

It is paramount to have a private key management system that enables to fully backup and recover private keys, so that organizations always remain in full control of their funds, without having to rely on a service provider that can default on its obligations (because of technological, process or human errors). Being able to recover your digital assets at any given moment must be safe and easy.

In order to support this process, Ledger Enterprise provides you with a comprehensive step-by-step guide to recovering your private keys independently. This is achieved through a seamless process using Ledger Nano hardware wallets; a simple, effective, and routine procedure that relies on the most widely used and third-party supported hardware wallet.

The Bottom line

Today, it is important for professional investors and financial institutions to have a well-established solution set up to secure, manage and service their digital assets. This means having full control over the lifecycle of your private keys. Ledger Enterprise enables you to be at the forefront of the security of your asset management without compromising on governance and recovery. Our team of experts remains available to drive you through the Ledger Vault capabilities. Contact them here.