Institutional Bitcoin Custody Model Questioned Over Risks From Traditional Finance Framework

Control of Bitcoin is determined directly by private keys, and no central authority can reverse a transaction once it is recorded on-chain. Companies that entrust both their assets and keys to a single custodian still face the risks of hacking, internal control failures and service disruptions. Wizardsardine CEO Kevin Loaec argues that this puts the counterparty risk Bitcoin was designed to eliminate back onto the balance sheet.

Loaec raised the issue in Finextra on February 23, 2026, and again urged companies in The Fintech Times on April 2 to adopt multisignature arrangements, distributed control and recovery paths. Coinbase Custody’s published offering, for example, requires a minimum balance of $500,000, charges an annual custody fee of 50 basis points and carries an implementation fee ranging from $0 to $10,000. Loaec argues that fees and insurance are no substitute for on-chain control.