BitGo and TOPPAN Conduct Proof of Concept for Decentralized Key Management of Digital Assets Amid Rising Fraudulent Outflows

Key Points of This Article

• Decentralized management of private keys at three locations
• Aiming for service launch in 2028

Proof of Concept for Decentralized Key Management

On the 12th, U.S. digital asset infrastructure company BitGo (NYSE: BTGO) and TOPPAN Co., Ltd., which develops information-related businesses, announced that they conducted a proof of concept for a "decentralized key management scheme" from August to October 2026.

The purpose of establishing the decentralized key management scheme is to enable safe and smooth management of digital assets. They explained that they will further enhance operational operations and aim for a service launch in 2028, assuming the acquisition of necessary approvals from authorities.

The background of this proof of concept is that while the utilization of digital assets is rapidly advancing both domestically and internationally, there have been ongoing incidents of fraudulent outflows and cyberattacks that exploit the vulnerabilities of management systems. Additionally, as attacks become more sophisticated and diversified due to the misuse of AI (artificial intelligence), strengthening governance systems such as preventing internal fraud and strict identity verification of trading partners has become an urgent task.

On the other hand, it was pointed out that building and maintaining a strict environment for managing and operating private keys, as well as a high-level corporate authentication system, requires significant costs and expertise, which currently limits implementation to a few large companies. This situation poses a significant barrier for local banks, municipalities, and businesses entering the digital asset sector.

Furthermore, it was noted that the traditional operation where only one entity manages the private key carries the risk of concentrated cyberattack risks, as well as the risk of data loss or system downtime due to natural disasters, creating single points of failure.

In addition to ensuring security, there has been a strong demand for establishing a safe and sustainable new key management infrastructure from the perspective of business continuity.

Content of the Proof of Concept

In this scheme, TOPPAN combined its high-level private key management environment and operational know-how cultivated in the card issuance business with BitGo's expertise in digital asset management to create a system for decentralized management of private keys used for managing digital assets at three locations.

The following image shows the structure and conceptual diagram of the proof of concept. This time, the technology for decentralized management and operation of private keys among customers, TOPPAN, and BitGo was verified.

Source: Press Release

Additionally, this system is linked with TOPPAN's global corporate digital certificate vLEI issuance service "vLEI-Gateway™". It was stated that vLEI would be utilized to strictly verify the identity and authority of the target corporation and corporate representatives when using private keys or registering the destination whitelist for digital asset transfers.

These designs aim to eliminate single points of failure and achieve prevention of fraudulent transactions through third-party approval and reliable corporate verification. The announcement explained that this system is designed to ensure high security and appropriate management in the operation of private keys, such as key generation and decentralized management.

Looking ahead, as mentioned above, they aim for a service launch in 2028, but before that, final contract signing, obtaining approvals from relevant authorities, and technical and commercial preparations will be necessary.

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