Bitfinex implements multi-sig model for account verification

Source: Bitfinex

Bitfinex, the world’s leading Bitcoin exchange, today unveiled a new Bitcoin settlement and security architecture that for the first time ever offers complete segregation of all customer bitcoins.

Based on BitGo’s revolutionary multi-signature technology, the Bitfinex exchange now provides individual multi-signature wallets for each customer, allowing traders to verify funds on the blockchain for complete transparency while retaining institutional-level security.

“The era of commingling customer Bitcoin and all of the associated security exposures is over,” said Zane Tackett, Director of Community & Product Development at Bitfinex. “The trading community has long sought individually verifiable accounts without sacrificing security or performance. With the help of BitGo’s multi-signature technology, the Bitfinex team is very excited to be the first exchange in the world to automate Bitcoin settlements using ‘On-Blockchain’ customer segregated wallets.”

Similar to gold exchanges offering proof of physical gold, the Bitfinex exchange allows for near-real-time verification of customer Bitcoin balances as confirmed by the Blockchain. All funds and private transactions are secured with multi-institutional, multi-signature, two-step authentication and advanced policies that support individual and institutional trading activities.

“We’ve been working with Bitfinex for several months and are impressed by their dedication to security for their users,” said BitGo CEO Mike Belshe. “The industry has been clamoring for exchanges to adopt the multi-sig model, and we’re proud that Bitfinex selected BitGo’s platform to do it. This new level of transparency and security makes breaches such as those of Mt. Gox impossible.”

Like other current bitcoin exchanges, Bitfinex previously implemented security via a shared pool, similar to using one set of keys to access an entire bank vault. Today, Bitfinex uses a unique set of keys for each user, and separates each user’s funds on the public blockchain. This powerful combination of BitGo’s multi-sig technology with Bitfinex’s exchange mitigates most of the shared pool security risks while simultaneously enabling users to verify their individual holdings on the blockchain.
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