Crypto Custody Architecture Post-MiCA
How to optimize Hardware Security Modules (HSM) and Multi-Party Computation (MPC) structures while complying with EU regulations.
Translating Regulation into Code
The European Union's Markets in Crypto-Assets (MiCA) regulation imposes profound technical requirements on Crypto-Asset Service Providers (CASPs), beyond just legal obligations. Specifically, Article 75 (Safeguarding of client crypto-assets) mandates strict "Segregation of Assets".
The Technical Challenge: Asset Segregation
Traditional exchanges often hold all client assets in a single "Omnibus" wallet. However, MiCA standards recommend cryptographic segregation of client assets from company assets, and preferably from other clients' assets.
Recommended Architecture: Hybrid MPC + HSM
At KAI Informatics, we implement the following standards in our designs:
- Multi-Party Computation (MPC): There is no single Private Key. Key shares are generated across geographically distributed servers.
- FIPS 140-2 Level 3 HSM: Key signing operations occur within tamper-proof hardware.
- On-Chain Segregation: Separate derived addresses (HD Wallets) are used on-chain for each institutional client.
Operational Resilience
Protecting keys is not enough. MiCA also requires a Business Continuity Plan for service interruptions. Our systems are designed to run distributed on the Cloudflare Edge Network, ensuring 99.99% uptime resilience against DDoS attacks.