Imagine managing a million-dollar investment fund stored in a cryptocurrency wallet. Everything runs smoothly until a single mistake—clicking a phishing link, visiting a malicious website, or falling victim to an undiscovered exploit—allows hackers to drain the wallet. Just like that, the assets are gone forever.
This nightmare scenario has played out in several high-profile crypto thefts, including the Japan-based exchange Coincheck in 2018, the Ronin Network in 2022, and most recently, the Bybit exchange in February 2025. While the causes of these breaches varied—ranging from private key compromises to smart contract exploits—they all underscore the importance of multiple security layers in Web3.
One of these protections is the so-called “multi-sig wallet,” which requires more than one person’s signature, via their private key, to authorize a crypto transaction.
A cryptocurrency wallet lets users store, send, and receive crypto by managing their private and public keys. When making a transaction, the user, via the wallet, signs it with a private key, proving ownership before broadcasting it to the blockchain for validation. Wallets can be custodial (managed by a third party such as Coinbase) or non-custodial (fully controlled by the user) and come in software or hardware forms.
What is a multi-sig wallet?
A multi-sig wallet works the same way as a regular crypto wallet, but requires multiple users‘ private keys to approve a transaction, adding an extra layer of security. For example, a “2-of-3” setup requires two out of three key holders to sign off. This makes multi-sig wallets ideal for businesses, online communities, and shared accounts, reducing unauthorized transactions.
Think of a high-security bank vault or a missile silo that requires multiple keyholders to turn their keys at the same time. Multi-sig wallets work similarly, preventing any single person from moving funds unilaterally.
“A multi-sig wallet requires multiple parties to approve any transaction that moves assets,” Dan Hughes, founder of blockchain UX developer Radix, told Decrypt. “A common setup is ‘3 of 5,’ meaning five parties are authorized to sign, but at least three must approve for the transaction to be accepted into the network.”
While single-key wallets are typically used by individuals, businesses, decentralized autonomous organizations, and exchanges favor multi-sig wallets to ensure shared control over funds.
Cryptocurrency wallets that support multi-sig include:
- Bitcoin multi-sig wallets: Electrum, Specter, Casa
- Ethereum multi-sig wallets: Rabby, Castle, Safe Wallet from Safe (Formerly Gnosis Safe)
- Solana multi-sig wallets: Squads, Cashmere, Snowflake
Multi-sig wallets are becoming increasingly popular. In 2024, Safe managed over $100 billion in assets with 1.6 million monthly active users. BitGo reported processing over 8 of all global Bitcoin transactions by value and with over 1,500 institutional clients in over 50 countries. Meanwhile, the Solana-based Cashmere wallet claimed $100 million in total value locked.
