The French Ledger, which is best known as a manufacturer of crypto hardware wallets for retail investors, has been actively promoting its Ledger Vault custodian solution, which targets institutional clients since last year. Ledger is currently offering this product to MicroStrategy, which invested most of its capital in bitcoin in August.
Last week it became known that the payment company Square has invested $ 50 million in bitcoin. The company has developed an open-source solution, SubZero, to protect its assets.
Jean-Michel Pailhon, president of product at Ledger, said both companies are using hardware security modules (HSMs) to manage digital assets. HSMs have been used for decades to protect critical data. According to Payon, while SubZero can be a great solution, it's best for tech companies like Square that know how to deploy and manage HSMs. Ledger can set up a similar solution for all of its corporate clients. “They don't need to know how it works. They can use this solution,” Pailhon said.
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These solutions typically use multi-signatures to confirm transactions, where, for example, the CEO, CFO, and General Counsel have one signature each. When a firm employee wants to initiate a transaction, he logs into the Ledger Vault and enters the desired transaction. After that, a notification will be sent to all three signatories. To approve a transaction, they will need to log in, connect their Ledger Blue hardware wallet, and sign the transaction. There is also an additional layer of protection in which one of the parties can completely abort the transaction, provided that the minimum number of signatures has not yet been collected.
Pailhon stressed that while Ledger maintains the HSM infrastructure, the client is an independent custodian. That can be a problem as some companies are required by law to use regulated custodian services. However, according to Pailhon, such a requirement is reasonably easy to fulfill: "If you need a controlled custodian, you can ask him to become one of the signers of the transaction."
MicroStrategy has not officially identified the custody services the company uses to store its 38,250 BTC.