Swiss bank now does 3-of-5 multisig bitcoin loans but you only get 1 key

[DKeller]

Sygnum and Debifi launched MultiSYG, a BTC backed loan where your collateral sits in its own multisig wallet instead of just sitting with a custodian. Bitcoin.com says it looks like the first regulated bank doing this. Funny thing is it was supposed to go live in H1 2026 and right now it’s only advertised on Sygnum’s site, you can’t actually use it yet.

The setup is 3-of-5. You get one key, Sygnum has one and the rest go to independent institutional keyholders they won’t name for security reasons. Max LTV is 65% and if there’s a margin call the liquidation gets signed by the bank and the other parties.

Being able to check your coins are still where they should be is nice. But with 1 key out of 5 the borrower can’t really block anything. If the bank and two unnamed parties agree the coins move. So you’re basically trusting that three of them won’t collude with Swiss bankruptcy remote rules as the safety net.

Is that actually better than the 2-of-3 setups Unchained and others use? Would you be fine not knowing who holds the other keys? And is 65% LTV too aggressive with how fast BTC can dump?

[promise444c5]

Is that actually better than the 2-of-3 setups Unchained and others use? Would you be fine not knowing who holds the other keys? And is 65% LTV too aggressive with how fast BTC can dump?

Kinda .. I guess the way they want it is 2 key for Sygnum and another 2 key for Debifi, while the person taking the loan gets the last key as the last in the chain structure.  The extra keys are just backups while if any side screws up entirely they can contact the last entity on the chain to still make  the txn possible.

In that case, the last key is practically useless until any side screws up its entire keys or both side lost one key each or one of them doesn’t need the other to make the txn happen..

Here’s the official sources btw:
Sygnum: https://www.sygnum.com/news/sygnum-and-debifi-combine-bitcoin-multi-sig-technology-with-regulated-bank-lending-service/
Debifi: https://debifi.com/blog/en/sygnum-debifi-combine-bitcoin-multi-sig-technology

[hosemary]

Is that actually better than the 2-of-3 setups Unchained and others use? Would you be fine not knowing who holds the other keys?

I did a search, but couldn't find many details about how the keys are going to be splitted, so it's difficult to say without knowing more details.
I can only guess that they are going to use a 3-of-5 multi-signature wallet rather than a 2-of-3 to reduce the risk of collusion between the key holders.

[Don Pedro Dinero]

Is that actually better than the 2-of-3 setups Unchained and others use?

On a particular level, I prefer the 2-of-3, having me 2 in two different locations and 1 held by the company.

Would you be fine not knowing who holds the other keys?

Not really. Not your keys, not your coins. But I’d like to know more about this. If they operate in the same way as custodians who hold shares, there shouldn’t be a problem, but I doubt the regulations are even remotely similar.

[hosemary]

On a particular level, I prefer the 2-of-3, having me 2 in two different locations and 1 held by the company.

You seem to have misunderstood the purpose of the multi-signature wallet discussed in this thread.
We are talking about the wallet holding the borrower's collateral. Neither the borrower nor the lender should have full control over it.

[348Judah]

I want to believe those that are into taking loans with find these more suitable for them, but of course I don't see it as an important development concerning me because I will not admit anything that will subject me to taking loan or sharing my private keys information with a touch party, they actually know their way out even if the last person to contacted wasn't reachable, definitely resulted to the third option and get to perform the transaction, either sharing of the private keys or taking loan is not a good sign for me in Bitcoin.

[Hamza2424]

I will honestly have a problem when they say, for security reasons, they can't name the other keyholders, but at least they can give their assurance if they haven't already.

Because otherwise, I just have to believe what they are saying without any verification, and the collusion you talked about is a good point, bro. But, bro, I think it is a little bit harder to collude, but it won't be much better for the borrower himself.

65% LTV can be aggressive, but I think it depends on how much time you get to top up. Like, if the margin call is near and liquidation only needs the bank and the other two parties to sign, then the borrower has no time to react. But this must be for institutional guys, and I am an old guy, and I still follow the old rule. You know it, haha. I own the keys, and I control the coins.

[bitbollo]

by itself conditions doesn't looks bad at all. what is the interest they would charge annually? 65% isn't the cheapest but the conservative rate would look interesting considering the setup.
this is another "primitive" approach as guarantee for an user - anyway these can been seen somewhat "essential" if you want to access to a loan with a financial institution (and you are fully unbanked).

you can't exclude the trust issues related coins holding.  just to mention, most of these service would not provide any way to recover funds (example nexo)
in italy they have a bank that offer bitcoin custody (not yet loans) with a 2-of-3 signature. what is interesting 2 of these keys are still in their archive but one mentioned completely offline.

[Zaguru12]

I did a search, but couldn't find many details about how the keys are going to be splitted, so it's difficult to say without knowing more details.
I can only guess that they are going to use a 3-of-5 multi-signature wallet rather than a 2-of-3 to reduce the risk of collusion between the key holders.

I read through the news and you were right it would be a 3-of-5 multi-signature wallet with the keys splitted as follows;

Sygnum holding one key as a co-signer
Borrower also holding one key too
While the remaining keys are held by independent institutional key holder which I assume will be three different institutions.

This actually balances the question but my concern is that can’t the bank ask for signing permission from this key holder institutions and if they can do that then they can simply spend from that wallet without needing the borrowers signature.

[hosemary]

This actually balances the question but my concern is that can’t the bank ask for signing permission from this key holder institutions and if they can do that then they can simply spend from that wallet without needing the borrowers signature.

They probably won't do that without a valid reason.
The wallet is 3-of-5, meaning that three signatures are required to make transaction. If the bank wants to move the funds, it will need at least two out of those three key holders to agree with the decision.

This is just my guess, as there aren't many details available.

[BlackHatCoiner]

A 3-of-5 multisig where you only hold one key isn't a multisig for you, it's a multisig for them.

Also, 65% LTV is incredibly aggressive for Bitcoin. A single nasty weekend wick could easily trigger a margin call, and by the time you wake up and check your email, those three anonymous keys will have already signed away your stack.

[Mrbluntzy]

The setup is 3-of-5. You get one key, Sygnum has one and the rest go to independent institutional keyholders they won’t name for security reasons. Max LTV is 65% and if there’s a margin call the liquidation gets signed by the bank and the other parties.

Is that actually better than the 2-of-3 setups Unchained and others use? Would you be fine not knowing who holds the other keys? And is 65% LTV too aggressive with how fast BTC can dump?

What's actually the need of the borrower having one key when the rest of the keys that's going to be with Sygnum and the other independent institutions can be able to access and liquidate the borrower's Bitcoin during a margin call? The borrower is directly handing his or her Bitcoin to the company because the one key the person holds can not initiate a transaction and can not stop the company from accessing the collateralized Bitcoin. 

Well, being fine not knowing who is going to be with the rest of the keys totally depends on the fund recovery policy of Sygnum, assuming that they experience system bridge or out of negligence, those keys gets into wrong hand and the bitcoin was successfully taken by scammers, what are they going to do to refund the borrower? The 65% loan to value is crazy, this whole thing is risky for me.

[Antidote47k]

Being able to check your coins are still where they should be is nice. But with 1 key out of 5 the borrower can’t really block anything. If the bank and two unnamed parties agree the coins move. So you’re basically trusting that three of them won’t collude with Swiss bankruptcy remote rules as the safety net.

The borrower having only one key means he has limited veto power, they can’t do anything if three of the other party decides to sign a transaction, this doesn’t necessarily make the design pointless, it can still prevent any single party from moving the funds alone, provide verifiable on chain collateral while still reducing reliance on a single custodian. Now the real question is how much protection the key distribution, contractual rules and liquidation provides for the borrower.

Since the other 3 parties holding the other keys are said to be anonymous I’m curious about their relationship with the company and how the relationship affects their decision making. Are they independently governed and what’s preventing them from signing prematurely??

[Etranger]

Sygnum and Debifi launched MultiSYG, a BTC backed loan where your collateral sits in its own multisig wallet instead of just sitting with a custodian. Bitcoin.com says it looks like the first regulated bank doing this. Funny thing is it was supposed to go live in H1 2026 and right now it’s only advertised on Sygnum’s site, you can’t actually use it yet.

The setup is 3-of-5. You get one key, Sygnum has one and the rest go to independent institutional keyholders they won’t name for security reasons. Max LTV is 65% and if there’s a margin call the liquidation gets signed by the bank and the other parties.

Being able to check your coins are still where they should be is nice. But with 1 key out of 5 the borrower can’t really block anything. If the bank and two unnamed parties agree the coins move. So you’re basically trusting that three of them won’t collude with Swiss bankruptcy remote rules as the safety net.

Is that actually better than the 2-of-3 setups Unchained and others use? Would you be fine not knowing who holds the other keys? And is 65% LTV too aggressive with how fast BTC can dump?

Honestly, I’m not at all surprised that it was the Swiss who came up with and implemented this. Indeed, the 2-of-3 scheme seems like a standard, but for institutional banking, it carries an unacceptable risk of extortion, which the Swiss simply cannot allow under any circumstances (I lived there for a while, and I saw this quite clearly in the people). A borrower should a priori have fewer rights and powers than a bank. At the same time, the new scheme allows the system to function even if one of the institutional keyholders is temporarily unavailable or compromised, and that is precisely the continuity and stability of the Swiss system, both in the economy and in life in general.

[Faisal2202]

Is that actually better than the 2-of-3 setups Unchained and others use? Would you be fine not knowing who holds the other keys? And is 65% LTV too aggressive with how fast BTC can dump?

I would not be worried about who holds the other keys, but the setup of the keys is really worrisome because they only need 3 keys to move the funds, and us holding 1 means nothing. That's not good for this, but if they have other terms, then that's a different case. But why show off this feature like it's something that others are not doing?

I assume everyone is probably using these multisigs to secure the funds they manage for others as custodians. Now, why would they take a step like this? They can just say we will hold the keys and give you X LTV and explain how much room we have before liquidation, etc.

[stompix]

Funny thing is it was supposed to go live in H1 2026 and right now it’s only advertised on Sygnum’s site, you can’t actually use it yet.

It's 23 October; the company is Swiss and at this time it's the date of Plan BTC Forum in Lugano , so they need to announce stuff

They did it last year: 24 October 2025
https://www.sygnum.com/news/sygnum-and-debifi-combine-bitcoin-multi-sig-technology-with-regulated-bank-lending-service/
They did it this year: 23 October 2026
https://www.sygnum.com/news/sygnum-and-debifi-launch-multisyg-as-bitcoin-client-collateral-exceeds-80-up-30-since-2023/

They will do it again in 2027 

[Amphenomenon]

Being able to check your coins are still where they should be is nice. But with 1 key out of 5 the borrower can’t really block anything. If the bank and two unnamed parties agree the coins move. So you’re basically trusting that three of them won’t collude with Swiss bankruptcy remote rules as the safety net.

This reminds me of childhood memories where giving parents your money means losing control of your funds though you are the sole owner.

I will probably have to go through this but currently from what I can get, I will say all these false pretence in supporting bitcoin through regulation that leaves customers with an high potentiality of getting victimised needs to stop.

[retreat]

That sounds pretty convincing, but 3-5 with the split of 1 key for the borrower, 1 key for Sygnum, and 3 keys for independent institutions means that if needed, Sygnum can move the assets without the borrower's approval, because no one knows who those 'independent institutions' are. Not to mention with a 65% APR, it can still be considered aggressive, though borrowers might be given the option to top up so their loan doesn't get liquidated when the collateral value drops.

So actually, this multisig model is just a marketing strategy to make their service look "safe" even though it's basically the same as other services.

[Stalker22]

Is that actually better than the 2-of-3 setups Unchained and others use? Would you be fine not knowing who holds the other keys? And is 65% LTV too aggressive with how fast BTC can dump?

I would not be worried about who holds the other keys, but the setup of the keys is really worrisome because they only need 3 keys to move the funds, and us holding 1 means nothing. That's not good for this, but if they have other terms, then that's a different case. But why show off this feature like it's something that others are not doing?

Of course they are going to leave the option to move funds without needing your key.  I mean that is the whole point of collateral isn't it?  Think about it - if you default or hit a margin call and refuse to sign off with your key, the bank would be completely stuck holding the bag while you hold their cash.

That said, its pretty ridiculous to call that a multi-sig when your own key is mostly irrelevant in terms of securing your own assets.  It is pretty much just institutional marketing fluff.  At the end of the day, three third parties you never heard of can sign off and liquidate you whenever they want.  You are still basically trusting a custodian with extra steps... No chance.

[promise444c5]

~

I had to go through the link posted by Stompix to actually spot that the one I read earlier was the old version[2025].. the new version[2026] has been rephrased with a lot of addition and modifications including how they will be distributed , posted by OP.

I wanted to ask earlier where OP got that same  claim from since their post has no source but that won’t be necessary anymore.

Alright.. so who are these independent institutional holder? I guess that will be added October next year.but it’s not really that important to the person taking the loan anyway, the borrower key can’t prevent spending.