Safe joins forces with Sygnum Bank, Coincover for crypto recovery service

On-chain custody protocol Safe (formerly Gnosis Safe) has partnered with digital asset banking group Sygnum and UK-regulated recovery service provider Coincover to launch an optional crypto recovery service for users.

The service, called ‘Safe RecoveryHub’, offers a range of options from self-custody to custodial and social recovery, according to a statement.

According to Safe, RecoveryHub users can, if necessary, restore their access to crypto assets through designated “recoveries,” including personal backup devices, family members, friends, or other social recovery collaborators. Additionally, trusted third parties such as Sygnum Bank and Coincover will offer a more formal recovery process, the team said.

Notably, users retain control over their accounts, granting restorers access only when initiating a restore event, and can veto such attempts. Users can also set up multiple recovery programs, requiring a threshold to improve security.

“Rather than being faced with a binary choice between self-detention or deprivation of liberty, users can optimize a key recovery solution that fits their personal risk preferences,” said Safe co-founder Lukas Schor.

Self-control and potential challenges

While self-custody is touted as one of web3’s core value propositions, ensuring users maintain full control over their assets, unlike the custody solutions of centralized exchanges and wallets, there are tradeoffs. Coinbase CEO Conor Grogan recently estimated that more than 912,000 ETH, now worth more than $2 billion, had been lost due to Ethereum-based user errors and buggy contracts – 0.75% of the circulating supply. That’s where alternatives to social recovery can come into play, especially for institutions.

“As the self-custody market expands and new use cases emerge, there is a growing need for reliable institutional recovery solutions,” added Thomas Eichenberger, CPO of Sygnum Bank. “For individuals who own valuable digital assets, supplementing self-custody with additional safeguards balances the desire for financial sovereignty with the need for risk management.”

Safe said the recovery service is available to all Safe Wallet users from today, with partner solutions launching in the first half of 2024.

Notably, a similar recovery solution that uses advanced cryptography and multi-party computation was introduced earlier this year by hardware wallet provider Ledger, also in partnership with Coincover.