Blockstream and Thales have launched an enterprise Bitcoin custody system that moves transaction signing inside hardware security modules (HSMs), aiming to reduce exposure to AI-assisted attacks and connected-device compromises. Announced on Nov. 13, the solution is delivered through Blockstream Enterprise and builds on a two-year relationship between the Bitcoin infrastructure firm and the French technology and cybersecurity group.
The system combines Thales HSMs with Blockstream’s Secure Multi-Party Computation (Secure-MPC) technology. Unlike conventional MPC setups that may run parts of the signing process on general-purpose computers, Blockstream says the entire signing protocol executes within the HSM’s secure environment. It also uses FROST, a threshold signing protocol that lets multiple authorized parties jointly produce a signature without ever reconstructing the full private key.
“By moving MPC execution inside the HSM, this architecture addresses critical security risks,” said Jeff Boortz, Blockstream’s chief product officer.
The launch comes about two weeks after hackers stole roughly $6.3 billion from Binance in what the FBI attributed to North Korea. Investigators said the attack leveraged fake job interviews, malware planted through a coding assignment, and an internal AI tool to compromise employee machines and obtain credentials. Blockstream co-founder and CEO Adam Back warned that AI could make it easier for attackers to find small flaws in complex MPC implementations, and that complex protocols can make fully offline cold storage difficult.
Blockstream itself experienced security pressure in September, when its Liquid Network sidechain was drained of nearly 4,000 BTC through a software bug; attackers returned about 3,400 BTC after the flaw was patched. The new custody architecture is intended to address such weaknesses by keeping signing operations sealed inside dedicated hardware.
Institutional demand for Bitcoin custody has grown since spot Bitcoin ETFs launched in 2024. “Financial institutions require secure, reliable infrastructure as they integrate bitcoin into their existing operations,” said Michael Minkevich, Blockstream’s president and chief operating officer. The news arrives with Bitcoin trading below $70,000 after a sharp sell-off, but Blockstream framed the launch as a longer-term infrastructure upgrade for the next wave of institutional adoption.
