Hardware wallet, multisig or collaborative custody?

No way of holding bitcoin is safe from everything. What differs is how many separate things have to fail, or be stolen, before the money is gone, and what those things are. Counting them is a useful way to compare.

A wallet on your phone

The key lives on the phone, encrypted, and a seed phrase backs it up. It’s an easy way to start, and the phone is an always-online computer that runs other apps, opens links and gets lost.

One thing is enough to lose the money: malware, a fake wallet app, a page that tricks you into typing the words, or the words found by someone else. In August 2022, thousands of Solana wallets were drained in a few hours; researchers found that one wallet app, Slope, had been sending its users’ recovery phrases, unencrypted, to an outside service that logged errors.

A hardware wallet

A small device creates the key, keeps it offline and signs transactions inside itself, so the key never touches your computer or your phone. That closes the main door a phone wallet leaves open: malware on the computer can’t copy a key that never leaves the device.

What’s left is still one thing. The seed phrase restores everything, so whoever has it has the money. And the device has to be what it claims to be:

• In July 2026, Coinkite disclosed that a firmware error, present since March 2021, had made the recovery phrases created by some of its Coldcard devices far less random than they should have been, so they could be guessed. According to TRM Labs, attackers took about 1,816 bitcoin from more than 5,200 addresses.
• In October 2026, Ledger confirmed that devices sold by CryptoBilis, a reseller it had authorized in Malaysia, Indonesia and the Philippines, carried a hidden chip that read the 24 recovery words off the screen and sent them out over the mobile network. Researchers tracing the money put the losses at up to 93 million dollars, from more than 300 wallets; Ledger hasn’t confirmed a total.

Then there’s the threat no device stops: someone forcing you to unlock it. A public list of physical attacks on bitcoin holders, kept on GitHub, records 167 in 2025, more than in any earlier year, as of October 2026, and it says itself that it isn’t complete. In France, 2025 brought a series of kidnappings tied to crypto, among them a co-founder of a hardware wallet company in January; by June, 25 people had been charged over the attempts that spring.

The address on the box

A hardware wallet has to be sent to someone, somewhere. On the way, the order passes through the maker’s online shop, a payment company, a courier and often a support desk, and each of them keeps a record of who bought a crypto wallet and where it went. Those records have leaked again and again:

• 2020. Ledger. A customer database taken in June was published on a hacking forum in December: about a million email addresses, and the names, postal addresses and phone numbers of some 272,000 customers.
• January 2024. Trezor. Someone got into the outside system it used for support, which held the names and email addresses of up to 66,000 people who had written to it since December 2021.
• January 2026. Ledger, again, through Global-e, the company that handles payments for its online shop: customers’ names, postal addresses, email addresses, phone numbers and orders. Ledger didn’t say how many.
• August 2026. Trezor, again, through ShipMonk, its shipping company: the names, shipping addresses, email addresses and phone numbers of about 81,000 customers, among them US orders from 2019 to 2021 that ShipMonk should have deleted under its contract.
• October 2026. Keystone. Someone got into its online store and took customers’ names, contact details, shipping addresses and orders.
• October 2026. Foundation. Attackers got into part of its systems and emailed customers a fake product recall, some messages with their real home address, phone number and purchase history, to get their recovery phrases.

These leaks didn’t empty wallets on their own. They did something worse: they told criminals who owns crypto and where they live, and a home address can’t be changed like a password. After Ledger’s 2020 leak, customers received emails from people who said they weren’t afraid to invade their homes. One customer reported a phone call from someone who had their details from the leak, threatening to come to their home, kidnap them and kill any relatives found there. Others received fake “replacement” devices in the mail, with a letter telling them to type their recovery words into its app. In January 2021, Ledger said it would delete its customers’ names, addresses and phone numbers as soon as it could. In January 2026, the company that ran the payments for its online shop leaked Ledger customers’ names, addresses and phone numbers again.

There’s no safe way to buy one

Every way to buy a hardware wallet leaves you exposed to one of two risks: your address in records that leak, or a device you can’t see inside. The makers’ advice, to buy from their own website or from a reseller they’ve authorized, gets you out of neither.

• Delivered to your home. Your name, address and phone number go into the records of the maker, its payment company and its courier, and the leaks above show where those records end up, sooner or later. Keystone, apologizing for its own, wrote: “We failed to fulfill our commitment to erase customer data on time.”
• Bought from a reseller. No delivery and no address on file, but no way to see inside the box either. The implanted devices above were sold by a reseller Ledger had authorized: buying where the maker told people to buy didn’t protect them. In Europe, the electronics chain MediaMarkt stopped selling Ledger devices, in its stores and online, after a customer in Germany reported finding an implant.
• Checked by the maker. A device that passes its maker’s authenticity check isn’t proof either. In October 2026, Keystone said the key its devices use to prove they’re genuine had been stolen, so counterfeits could pass the check, and that it would destroy 18,835 unsold devices.

Unlike phone makers, hardware wallet makers have no chain of shops of their own: in most places, the only choices are a delivery or a reseller.

The one way out of the first risk is a delivery address that isn’t your home: a pickup point, a post office box, an office. Few buyers use one. And however it’s bought, a hardware wallet still rests on a single key: whoever gets its seed phrase, or the device and its PIN, gets the money.

If you buy one anyway:

• buy it from the maker’s website, and have it delivered to a pickup point or a post office box, not your home;
• use an email address you use for nothing else;
• treat any recall, replacement or security warning that arrives by email, text or post as a scam until the maker’s own website says otherwise.

A wallet that’s only an app has nothing to ship: no delivery address to leak, and no box to tamper with. What else a service keeps about you is worth asking before you sign up.

Multisig

Several keys, kept in separate places, and a rule about how many must sign; two of three is common. A thief needs two keys, not one, and losing one key doesn’t lose the money.

What it costs is more to look after: a backup for each key, and one thing people forget, the wallet’s configuration, meaning the list of keys and the rule. With the keys alone, a wallet can’t always work out which addresses it used, so the configuration, often saved as a “descriptor”, needs copies too.

If you hold every key yourself, two weaknesses stay. Each key is usually a hardware wallet, so each one is another order, another delivery and another record with your address. And all the keys are yours: someone who gets to you can make you use every one of them.

Where multisig failed, one company held the keys

None of these thefts from multisig wallets broke the cryptography. In four of the five, one company held enough of the keys to sign by itself, so a rule meant to need several hands needed only one:

When	Where	How much	Who held the keys
August 2016	Bitfinex	119,756 bitcoin	Bitfinex held two of the three keys. Its withdrawal limits “were bypassed”, as it put it, and how was never made public.
March 2022	Ronin	About 625 million dollars	Withdrawals needed 5 of 9 validators. One company ran four, and a permission it had been given and never revoked gave the attacker the fifth.
June 2022	Harmony	About 100 million dollars	The bridge’s few keys sat on Harmony’s own servers. Attackers got in through a developer’s laptop and took two, enough to sign.
July 2024	WazirX	More than 230 million dollars	The keys were split between WazirX and a custody company, and the signers still approved a transaction that, according to WazirX, wasn’t what their screen showed. The custody company says its systems weren’t breached.
February 2025	Bybit	About 1.46 billion dollars, according to Elliptic	Every signer was Bybit’s own. Code planted through a developer’s computer at its wallet provider showed them a routine transfer, and what they signed handed over the wallet. The FBI attributed it to North Korea.

WazirX is the exception, and the warning: keys in two companies’ hands still weren’t enough, because no one checked, on their own systems, what was being signed. Splitting the keys protects you only if each holder checks every transaction for itself.

Collaborative custody

A multisig wallet with the keys split between you and a company. A common setup has three keys: your everyday key, the company’s, and a backup key for recovery, kept somewhere else; any two move the money. Done properly, it answers each of the failures above:

• No one can move the money alone, the company included. Its key is one of three, never enough by itself. Bitfinex, Ronin, Harmony and Bybit failed because one company could.
• The company checks what it co-signs, on its own systems. It can refuse a transaction that breaks the limits you set, or make a large withdrawal wait: the check that was missing at WazirX. A limit also takes away what a thief at your door wants, which is speed.
• A lost key doesn’t lose the money. The company’s key and your backup move it to a new wallet, with a new key in place of the lost one.
• The company isn’t a single point of failure either. If it disappears, your everyday key and your backup move the money without it.
• Your key doesn’t have to be a device you buy. It can live on your phone, so there’s no box to tamper with and no delivery record with your address.

What it costs: while the company exists, you rely on its signature for everyday moves; it usually sees your balance and your transactions; and many charge a subscription. And the name is used loosely, so before choosing one, check who holds which key, what the company checks before it signs, and what you’d need to move the money if it were gone. The glossary entry has the questions to ask.

Side by side

	Phone wallet	Hardware wallet	Multisig, all keys yours	Collaborative custody
Enough to steal it	The words, or the unlocked phone	The words, or the device and its PIN	Two of your keys, or you, forced to use them	Two of the three keys, and the company’s comes with its checks and limits
Enough to lose it	The phone, if the words are lost too	The device, if the words are lost too	Two of the keys, or one if the configuration is gone too	Two of the three keys
Who checks a transaction	You	You	You	You, and the company on its own systems
Who can help you recover	No one	No one	Your other keys	The company, with your backup key
Your address on file	Not for the wallet: nothing is shipped	With the maker and the companies it works with	With each maker you bought a device from	Only if one of your keys is a device you had delivered

How to choose

• For money you spend, a wallet on your phone. If it’s lost or stolen, so is what’s in it, so keep it to what you’d carry in cash.
• For savings, collaborative custody that passes the test above: no one can move the money alone, the company checks what it signs and holds to your limits, a lost key can be replaced, you can leave without the company, and your key doesn’t depend on a box in the mail.
• A hardware wallet on its own is more work than a phone wallet and still a single key, and buying one puts your address on file or a device you can’t check in your hands.
• Multisig with every key yours removes the single key, but not the deliveries, nor the person who can be made to sign.

Whatever you choose, ask who else should be able to reach it if you can’t (the guide on inheritance goes through it), and whether you’ll still understand the setup in ten years.