Winklevoss Twins Win Patent for Securely Storing Digital Assets

Access to accounts requires unique cryptographic keys that split into multiple segments. When new accounts open, the system divides each key into segments and saves them to external devices—USB drives, paper cards, or laminated materials. The patent documentation explains the structure: "A respective reference identifier may be associated with each digital asset account. At least one of the one or more private keys corresponding to each digital asset account may be divided into a plurality of private key segments and written to a card along with the respective reference identifier to create sets of collated cards, wherein each set comprises cards corresponding to different private keys."

Production generates the keys, placing at least one copy on an electronic device such as a USB drive and keeping backup copies on physical media. If the storage location doesn't generate keys on-site, operators receive them via courier or fax. Those opening or accessing accounts must present three separate forms of identification.

The design supports multi-signature accounts distributed to multiple users who must together authorize each transaction. The patent documentation states: "In embodiments, private keys for a multi-signature account may be stored as backups, e.g., in secure storage, which may be difficult to access, and may be used in the event that more readily available keys are lost."

The twins' patent comes as major financial institutions pursue custody solutions for cryptocurrency holdings. Goldman Sachs said earlier this year that it would consider launching its own custody service. Venture capitalist Mike Novogratz told Ran Neu-Ner on CNBC's Cryptotrader program that institutional clients needed custody from a reliable provider to push assets higher. "I think the next move up is going to need custody from a trusting source. [...] If I'm in the state of Wisconsin, I'm not going to risk my job on a company called BitGo."