Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-00332
Multisig quorum failure — 3-of-5 multisig (2016)
BlockedCase description
A June 2016 forum case describes a startup that used a 3-of-5 multisig for its Bitcoin treasury. The company went through a hostile acquisition and three of the five key holders aligned with the acquirer, who used their majority to move funds to addresses controlled by the acquiring entity. The two remaining pre-acquisition key holders had no legal recourse as the company had been legitimately acquired.
Custody context
| Stress condition | Multisig quorum failure |
| Custody system | Mobile or software wallet |
| Outcome | Blocked |
| Documentation | Unknown |
| Year observed | 2016 |
| Country | Unknown |
Structural dependencies observed
What this illustrates
Before anyone could access the funds, a legal process had to be completed first. Access was not recoverable.
Outcome interpretation
Access was not possible under the reported conditions.
Source
Publicly Reported
Evidence type
Forum post
Related cases involving multisig quorum failure
75 cases involve multisig quorum failure
569 cases involve mobile or software wallet
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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.
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