Crypto Custody, Cold Storage, and What Wallet Security Actually Means

The limits of a mantra

Thibault de Lachèze-Murel calls 'not your keys, not your crypto' a nice statement from the cyberpunk era. His problem is with the implementations built to follow it as closely as possible. He also questions hardware wallets: users cannot know whether firmware has malicious access, or whether an upgrade for staking features brings something bad onto the device.

He says large banks and IBM understand what the risk means for billions of dollars of customer assets, and that institutions have been moving away from consumer-style approaches for one year now, or a bit longer.

Access is the weak point

Smart contracts do not remove the need for custody, he says. 'It's not because you have components that is secure, that the access to this component is secure.' He also points to AI-written code, citing a $1,800,000 exploit at the lending protocol Moonwell on Base that was traced to a vibe coding error. Code needs a second pair of eyes whether a human or AI wrote it, he says.

How Dfns positions itself

Dfns decouples how users access the platform from the secrets that protect digital asset keys, and customers can run its products on their own infrastructure or on Dfns infrastructure. 'I don't want anybody to trust us,' de Lachèze-Murel says.

Cold storage done wrong

Thibault de Lachèze-Murel says a small HSM on a computer in a desk locker, which anyone can walk up to and use to sign transactions, is 'a very, very unsecure setup.' With a proper integrity check at the end of the process, he says, even a stranger asked to plug a USB key into the HSM could not misuse it.