2-of-3 Multisig Escrow Explained

2-of-3 Multisig Escrow

Where the selected product, asset and network are eligible, CoinExchange.Cash uses 2-of-3 multisig escrow. Three signing roles participate and any two are required to release the escrowed funds; this does not remove counterparty, dispute, key-management, network or implementation risk.

The Three Keys

• Key 1 — Buyer: Generated when the buyer enters the trade
• Key 2 — Seller: Generated when the seller enters the trade
• Key 3 — Platform Arbitrator: Held by the CoinExchange.Cash arbitration team

How It Works

1. When a trade begins, a unique escrow address is generated from all three public keys
2. The seller sends crypto to this escrow address
3. To release funds, two of the three keyholders must sign the release transaction

Release Scenarios

• Normal trade: Buyer + Seller agree → funds released to buyer
• Dispute (seller wins): Seller + Arbitrator agree → funds returned to seller
• Dispute (buyer wins): Buyer + Arbitrator agree → funds sent to buyer

Why 2-of-3?

• No unilateral spend path: Under the intended script, no single signer can move escrow funds alone
• Non-custodial: CoinExchange.Cash never has sole control of your crypto
• Fair disputes: The arbitrator can only act alongside one of the trading parties

Supported Chains

Native 2-of-3 P2WSH multisig is implemented for Bitcoin and Litecoin. EVM contract source is published but no production address is currently published; other chain engines remain in development. See the public Security page for current maturity and verification evidence.

Security Notes

• Escrow keys are encrypted with your trade password and never stored in plaintext
• The platform arbitrator key uses software key custody: AES-256-GCM encrypted storage in PostgreSQL, with plaintext present in process memory during signing
• Hardware HSM integration (such as CloudHSM or YubiHSM) remains future work
• Escrow actions are recorded in the platform audit log; this is not an immutable public ledger