New Market Trading (NMT), an onchain wealth management firm, has announced a significant security upgrade for all client accounts. The company is implementing a 2-of-3 multisig security model, a standard previously reserved for large exchanges, hedge funds, and institutional custodians. This move brings institutional-grade protection to individual investors, ensuring that client funds are safeguarded with multiple layers of authorization.
How the Multisig System Works
Under the new system, each client account is secured by three cryptographic keys. The client holds two keys: one primary key and one backup key. The third key is held by the client's NMT associate. Any transaction that moves funds out of the account or changes key ownership requires approval from at least two of these three keys. This design ensures that the client retains full control, as they possess two of the three keys and can act independently without needing NMT's approval.
Previously, accounts were protected by a single key, which posed a risk if that key was lost or stolen. With the new multisig setup, if one key is compromised, the other two can be used to replace it without freezing assets or requiring complex recovery processes. This upgrade is applied automatically to all existing accounts, with no action required from clients.
Built for Every Client
Traditionally, implementing such security measures required dedicated engineering teams, making it accessible only to large institutions. NMT has integrated this protection directly into its account technology, allowing any client to benefit without needing technical expertise. The extra approval step is only required for outgoing transactions or key changes; everyday portfolio adjustments within approved strategies continue to operate automatically.
"We built this directly into the account itself, not as a setting in our own backend. The two-key requirement is enforced automatically, every time, which means it holds even if something on our end ever went wrong," said Ajdin Kahrović, Chief Technology Officer of New Market Trading.
Flexible Key Combinations
The three keys can be combined in various ways to suit different needs. For instance, the client's primary and backup keys together allow the client to act entirely on their own, including replacing their NMT associate. The client's key and the associate's key can handle everyday management activities. If the client's primary key is temporarily unavailable, the backup key and associate's key can keep the account operational.
No single key, including NMT's, can withdraw funds or change account ownership on its own. This design guards against a single lost or stolen key, though it does not protect against all scenarios, such as two keys being compromised simultaneously or a client approving a malicious transaction.
Security and Recommendations
NMT recommends that clients store their backup key's recovery information separately from their primary key to maximize security. The upgrade is available immediately to all existing clients and requires no migration or asset movement.
"Multisig protection has always been available to institutions with the resources to build it themselves. We don't think our clients should get a lesser version of that security just because they're managing their own account instead of a fund. This is now built into every account we offer, not something a client has to ask for," said Frank Hepworth, Founder and CEO of New Market Trading.
This security enhancement aligns with NMT's broader mission of providing direct ownership and control to clients through blockchain technology. The firm uses ERC-4337 smart account technology, allowing clients to own their accounts directly while delegating trading management to NMT, who can execute strategies but never withdraw or redirect funds.
This article is for informational purposes only and does not constitute financial advice.
