Collaborative Custody

Collaborative custody (also called collaborative multisig) is an arrangement where Bitcoin is held in a multisignature wallet requiring approval from multiple parties — typically the borrower, the lender, and sometimes a third-party key agent — to move funds.

How it works in Bitcoin lending

In a 2-of-3 multisig setup, the borrower holds one key, the lender holds one key, and a third-party key agent holds the third. Any two of the three keys are required to move the Bitcoin. This means the lender cannot unilaterally move or rehypothecate your collateral — they need either your approval or the key agent's cooperation.

Why it matters

Standard custodied lending gives the lender sole control over your Bitcoin. Collaborative custody distributes that control. If the lender becomes insolvent, your Bitcoin cannot be moved without your key — protecting it from bankruptcy claims that affected Celsius and BlockFi customers.

Lenders using collaborative custody

Unchained Capital is the primary lender offering collaborative multisig custody in the Bitcoin loan market. Arch Lending uses qualified third-party custodians (Coinbase Prime and others) that achieve similar segregation.