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naddr1qq…98t6*50% of the Bitcoin held with Unchained will be seized by the US government within 10 years: a thought experiment **
Let me start by saying that I believe collaborative multisig is strictly better than leaving on an exchange, an ETF, or other paper Bitcoin options. I have extensively tested collaborative multisig at the 3 most well known providers: Unchained, Casa, and Nunchuk. My participation in Bitcoin Twitter and Nostr has led me to the conclusion that KYC collaborative multisig is shockingly easy to seize. If you care about this topic I will assume you are already based enough that you need no primer on the horrid fiscal situation of the governments of the USA, EU, China, etc. A 6102 (President FDR ordering the seizure of all privately held gold) type event feels escalatingly likely in the short term, and almost inevitable in the medium term.
There are a few indisputable facts everyone must accept: Most users of collaborative multisig have at least 1 key (probably 2) at one of the following: their home, a bank safety deposit box, or other highly logical place in their immediate vicinity. Unchained multisig vaults are fully KYC. Meaning they have a list of your name, email address, and home address right next to your BTC holdings amount, 1 of 3 keys to your multisig, and even Social Security Number and more info if you use their loan or trading desk services.
Hopefully you should immediately recognize the problem. The American government is 1 warrant away from having your full identity, BTC amount, and 1 of your 3 keys. Further they are most likely 1 visit to your home or bank away from having a 2nd key, and thus control of your BTC. Further, everyone must also accept that video verification is not much better than no verification. The government could also just come to your home (where you almost certainly have 1 key) and force you to submit a transaction request to Unchained. Per their own website Unchained does not have a specific minimum waiting period to submit transaction, e.g. it could be 1-2 days if you submit on a slow Monday or it could be 3-5 days if you submit over a weekend during a crowded Mempool. Even before considering AI fakes, video verification is simply not secure. It is quite easy to have someone stand out of shot holding you and/or your family hostage. The American government also has more than enough prison capacity to hold anyone indefinitely they need to while waiting for transactions to process. Sit and ruminate on the fact that all the government needs to do to take your Bitcoin is enter your home, use their monopoly on violence, and not so politely ask you to sign with your key and request Unchained sign with theirs. After a brief delay, all your BTC is gone forever! There is a brutal cognitive dissonance in believing Bitcoin will become worth millions of dollars per coin, and simultaneously thinking the government will not bother to visit one office, a few homes, or a handful of banks for untold riches. If the government gets desperate, then large holders using KYCed collaborative multisig are a potentially appealing target. Yes it is strictly harder to seize than an ETF or on an exchange, but that doesn’t make it foolproof. The easiest target is often the overconfident one. It would likely be too difficult to discretely visit many places and hold many people for enough time to seize all coins held by Unchained, but grabbing a significant portion of the largest holders before news broke is certainly plausible. Maybe I’m underestimating Unchained and they’re willing to go to prison for life, and during a government raid would wipe their servers rather than hand them over. But would you trust that with your life savings? I would not. In my assessment for users with less technical knowledge non-KYC multisig options such as Casa and Nunchuk are strictly better than a fully doxed option like Unchained. For those with more advanced technical knowledge the potential of miniscript and timelocks in Liana presents an even more secure option, albeit with the tradeoff of additional complexity. There is no free lunch. You must decide for yourself. Just please thoughtfully consider your options.
I hope this is not taken as an attack at Unchained. I believe they are a solid Bitcoin only company doing some great work, but I also think they and their users drastically underestimate their current vulnerabilities. My hope is not to harm them in any way, but to force an uncomfortable conversation that the community needs to have. My greatest hope would be multisig makes strides in security across the industry. Taproot enabling multisigs to look like singlesigs and not placing all spending paths publicly on chain would be a great place to start. Miniscript next. These advanced security capabilities are available today via Liana and Anchorwatch. These are the next generation of multisig that the community desperately needs. They just haven’t realized it yet, but they will once a few Unchained customers publicly get their Bitcoins seized.