In the high-stakes worlds of traditional finance and digital asset management, securing transactions against sophisticated threats is non-negotiable. A recent breach at a crypto exchange—where attackers exploited a multisignature (multisig) wallet to siphon $1.4 billion in ETH through a deceptive user interface (UI)—underscores the risks. Yet, the time-tested maker-checker framework, a cornerstone of fiat money transfers, offers a resilient blueprint that adapts seamlessly to digital assets. Even if a hacker compromises the maker’s email and targets checkers directly, a well-designed process can still foil the attack.

The Crypto Breach: A Digital Lesson

The exchange relied on a multisig wallet, likely requiring approvals from a subset of senior executives (e.g., 3 out of 5) to access a cold storage facility and authorize a transaction. The attacker succeeded by presenting a falsified UI, tricking approvers into signing a malicious transaction. This exposed a critical gap in procedural oversight: without a structured initiation and validation process, the system leaned too heavily on the UI’s apparent trustworthiness—leaving it vulnerable to exploitation.

Fiat Parallels: Handling a Compromised Maker

In traditional investment fund operations, a similar vulnerability arises with fiat wire transfers—consider a $1.4 million outward payment. Suppose a hacker breaches the maker’s email (e.g., a treasury staff member) and sends a fraudulent request to the checkers: “Wire $1.4M to account XYZ for vendor payment.” In a weak system, this might succeed—but a robust maker-checker process intervenes, even under compromise. Here’s how:

This succeeds because the checker’s diligence—especially the out-of-band phone call—operates independently of the hacked email channel. The hacker’s control over the maker’s account doesn’t extend to the client or the checker’s verification steps.

Adapting to Digital Assets: The Hacked Email Scenario

Though the traditional finance scenario differs from digital asset environments, the same logic applies to the crypto exchange’s $1.4 billion hack—and to digital asset funds broadly. Imagine a hacker compromises the maker’s email and sends a fake request to the checkers. Here’s how a fortified maker-checker process handles it:

Why It Holds Up

This process succeeds in both fiat and digital contexts because:

Had the exchange implemented this, the $1.4 billion hack might have been thwarted. Even if the hacker spoofed the maker’s email, a callback—“Did you request this massive transfer?”—would have unraveled the ruse, as the real maker or authority would deny it. Each step adds a barrier to deter attacks; no single solution guarantees total protection.

Cold Wallet Discipline: Fiat-Inspired Precision

Cold wallets, like bank vaults, demand meticulous handling—whether safeguarding $1.4 million in fiat or $1.4 billion in ETH. A maker-checker process enforces this:

This hybrid—real-world verification paired with blockchain precision—ensures administrators don’t rely solely on technical safeguards (vulnerable to UI spoofing) but reinforce them with human oversight.

Implications for Fund Administrators

Across fiat and digital assets, the threat persists: a hacked insider channel (like email) can initiate fraud. The maker-checker framework, proven in banking, adapts to crypto with minimal friction. It’s not foolproof—hackers might escalate to phone spoofing—but it forces them to breach multiple layers, not just one. For a $1.4 million wire or a $1.4 billion ETH stash, the defense remains consistent: split duties, verify intent, and confirm independently. As independent third parties, fund administrators review each case objectively, adding another layer of resistance to compromise.

A Practical Blueprint

To implement this resilient approach:

In an industry balancing speed and security, this process—rooted in fiat’s real-world wisdom and tailored to digital assets—offers a pragmatic shield. The $1.4 billion hack, like a foiled wire fraud, proves technology needs human backup. Even if a hacker hijacks the maker’s email, the four-eyes principle could prevent the loss.