Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01198
Customer withdrawals were suspended for 36 hours while the hardware failure was
SurvivesCase description
A crypto custody provider that used a distributed key management system experienced a quorum failure in September 2023 when a key server in one of three geographic jurisdictions suffered a hardware failure simultaneously with network issues at a second site. The provider's 2-of-3 signing requirement could not be satisfied with two sites unavailable. Customer withdrawals were suspended for 36 hours while the hardware failure was addressed. No funds were lost, but customers with time-sensitive transactions were unable to access their Bitcoin during the outage.
Custody context
| Stress condition | Multisig quorum failure |
| Custody system | Institutional custody |
| Outcome | Survives |
| Documentation | Unknown |
| Year observed | 2023 |
| Country | International |
Structural dependencies observed
Outcome interpretation
Access remained possible under the reported conditions.
Source
Publicly Reported
Evidence type
News article
Related cases involving multisig quorum failure
77 cases involve multisig quorum failure
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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.