Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-00863
Hidden wallet discovered — exchange custody (2021)
IndeterminateCase description
The Liquid hack post-mortem found the exchange had not published any description of its warm wallet architecture to customers. Customers who had relied on Liquid's reputation as a regulated Japanese exchange had no basis to evaluate the actual custody risk. The multi-party computation wallet setup had not been audited. No proof-of-reserves had ever been published.
Custody context
| Stress condition | Documentation absent |
| Custody system | Exchange custody |
| Outcome | Indeterminate |
| Documentation | Unknown |
| Year observed | 2021 |
| Country | Japan |
Structural dependencies observed
What this illustrates
There was no documentation of how access worked. Without it, there was no path back in. It's not clear whether anyone ever regained access.
Outcome interpretation
Not enough information is available to determine the outcome.
Source
Publicly Reported
Evidence type
News article
Related cases involving documentation absent
This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents.
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Framework references
Where Bitcoin Custody Intersects Legal and Fiduciary Authority
Where custody creates gaps in estate planning, fiduciary duty, and professional responsibility.
Professional Scope Boundary Matrix
What each professional or product covers, what they do not, and where gaps form between them.
The Independent Assessment Layer in Bitcoin Custody
How independent diagnostic layers emerge when multiple parties depend on shared infrastructure.
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