How Crypto Industry Is Rewriting Rules of Custody, Identity, and Defense in an Era of Automated Threats.
The crypto industry is shifting from simple self-custody to complex, AI-driven, tiered security models for custody, identity, and defense.Summary
The cryptocurrency security paradigm is evolving beyond the simple mantra of "not your keys, not your coins" to address sophisticated, AI-driven threats and institutional demands. For individuals, the primary defense remains resisting AI-enhanced social engineering by never exposing seed phrases, as emphasized by Trezor's Lucien Bourdon.
Exchanges are adopting AI as an early-warning system to monitor anomalous trading behavior, balancing automation with necessary human oversight for ethical response, as noted by BingX's Vivien Lin. Furthermore, exchanges like Bitget are prioritizing financial resilience, advocating for transparent Protection Funds and Proof of Protection alongside technical defenses.
Institutions are moving past the binary choice of slow cold storage versus fast MPC by implementing Tiered Programmable Custody, where security becomes code—using hot, warm, and cold layers managed by automated governance rules. Finally, the industry is grappling with on-chain identity; while CEXs currently offer a privacy stopgap, the long-term solution requires scaling decentralized storage to support verifiable credentials via ZK proofs, allowing users to prove identity without revealing all transaction history.
(Source：BeInCrypto)