Geographic Dispersion: Protecting Keys from Physical Threat
The Executive Verdict
Introduction: The '$5 Wrench' Vulnerability
Cybersecurity defends against hackers; Physical Security defends against coercion. If your C-Suite is in one room with all keys, your Multi-sig is an illusion. To truly secure a treasury, you must make it physically impossible for any one person—or group in one location—to move the money. This guide outlines the Geographic Key Management Strategy.
1. The Risks of Proximity: Why 'One Office' Fails
A. Coercion: Armed intruders can force a quorum of on-site signers to transfer funds. B. Disaster: Fire/Flood can destroy co-located backups. C. Seizure: Single-jurisdiction teams are vulnerable to local court freezes. Dispersion provides Resilience.
2. The '3-2-1' Rule for Digital Assets
Standard: 3 Signers/Backups minimum (5 preferred); 2 Different Media (HSM + Steel Plate); 1 Different Continent (or legal jurisdiction). No single localized disaster should touch >25% of infrastructure.
A Global Map diagram. Circle A (New York): CEO + Primary Key. Circle B (London): CFO + Primary Key. Circle C (Singapore): Legal Counsel + Recovery Key. Circle D (Swiss Bunker): Steel Backup.
3. Implementing the 3-of-5 Geographic Standard
Signer 1 (HQ - CEO); Signer 2 (Remote - CFO); Signer 3 (Int'l - Director); Signer 4 (External - Law Firm/BitGo); Signer 5 (Recovery - Offline Vault). Result: Attacking requires coordinating three cross-border physical assaults simultaneously.
4. Managing Physical Backups: The 'Deep Cold' Protocol
Do Not: Store seeds in office safes or password managers. Procedure: 1. Etch in Steel (Cryptosteel); 2. Bank Vault (Safety Deposit Box); 3. Shamir's Secret Sharing (Split seed into 3 parts, dispersed globally).
5. Jurisdictional Diversity: The 'Regulatory Air-Gap'
Geopolitics is a variable. Maintain one Recovery Signer in a stable, crypto-friendly jurisdiction (Switzerland/Singapore) to ensure Legal Standing and ability to pay defense fees if local assets are frozen.
6. Operational OPSEC: The 'Silent Signer' Policy
dispersion works only if attackers don't know the targets. Policy: 1. Anonymity (No LinkedIn 'Signer' badges); 2. Travel Restrictions (Max 2 signers on same plane); 3. Secure Logistics (Use Brink's/Malca-Amit for moving keys).
An 'Internal Security Policy' document mockup. Section 4.2: Travel limitations. Section 4.3: Storage of physical shards. Section 4.4: Emergency distress signals.
7. The 'Kidnap and Ransom' (K&R) Buffer
Technical Brake: Use a Timelock. If coerced signers execute a tx, it enters a 48h 'Pending' state. Automated alerts notify the remaining 3 safe signers, who Veto the tx and rotate keys. Dispersion buys Time; Time saves assets.
8. The Audit Checklist for COOs
Every 6 months: 1. Proximity Check (Are signers too close?); 2. Access Logs (Vault checks); 3. Succession Map (Who replaces Signer A?); 4. Device Health (Battery check); 5. Steel Integrity (Legible?).
Conclusion: Physical Security is a Fiduciary Duty
Key generation is just the start. The Physical Lifecycle is the long game. Geographic dispersion is not paranoia; it's Operational Resilience. Disperse people, shards, and legal risk to survive.
F.A.Q // Logical Clarification
Is coordinating 3-of-5 across time zones hard?
"Yes. That's the feature. High-value moves should be slow. Use Warm Wallets for daily ops."
Can I use a local bank Safety Audit Box?
"Better than a drawer, but carries Seizure Risk. Keep one backup in a Private Vault outside local banking rails."
What if a signer loses a device?
"With 3-of-5, it's a nuisance, not a crisis. Rotate the key using the other 4 signers."
Does this stop Inside Jobs?
"Yes. Collusion is much harder when conspirators are separated by oceans."
Module ActionsCW-MA-2026
Institutional Context
"This module has been cross-referenced with Operations & Security / Recovery & Disaster Management standards for maximum operational reliability."