The rise of digital assets has created new opportunities for financial institutions—but also new risks. As assets move across blockchains, custody platforms, and distributed systems, traditional perimeter-based security is no longer enough. That's why Zero Trust is becoming the gold standard in all major economic industries - and now for infrastructure protecting digital assets.
Zero Trust is a security model that assumes no user or system should be trusted by default, whether inside or outside the organization. It requires continuous authentication, strict access controls, and granular policy enforcement to minimize attack surfaces and prevent unauthorized access.
This article explores ten reasons Zero Trust is essential for modern digital asset management. Whether you're a fund, exchange, custodian, or trading firm, understanding and implementing Zero Trust can make the difference between operational infrastructure fit for purpose and an incident waiting to happen. For a foundational overview, see our guide to Zero Trust Security for financial and crypto institutions.
1. Assume Breach by Default
Zero Trust flips the legacy security model on its head. Instead of assuming everything inside your perimeter is safe, it treats every request as potentially hostile. This is critical in the digital asset world, where attackers may already have access to internal systems through compromised credentials, rogue APIs, or insider threats.
Cordial Treasury follows this principle at the infrastructure level—no internal system or user is automatically trusted. All requests to the Cordial Treasury API must be signed by a registered WebAuthn credential. Likewise, your Cordial Treasury nodes themselves have an associated identity, by design they do not have to trust each other, and are firewalled off from outside traffic with minimal network ports exposed.
2. Strict Enforcement of Least Privilege Access
In Zero Trust environments, users and systems are only granted the minimal permissions necessary to perform their tasks. This minimizes the blast radius of any compromise and enforces a separation of duties. Therefore, you should not rely on a few basic templates for user roles or permission sets. The stronger alternative is to create user roles and permission sets from scratch which best reflect a risk based approach to managing the specific day to day workflows of your operations.
Cordial Treasury allows institutions to define highly granular roles and user permissions. For example, a trading desk may be allowed to initiate transactions but cannot approve or sign them without reaching a quorum. Every resource in the system—users, addresses, assets, accounts, and more—can have specific rules assigned to enforce strict operational controls.
3. Continuous Authentication and Session Validation
Unlike traditional models that authenticate once and assume trust, Zero Trust requires ongoing authentication, session validation, and behavior monitoring. Every transaction and interaction must be explicitly verified and provide a means to log interactions for analysis. This relationship between collection and use of data related to the process flow should feed back into the policy engine.
This is core to Cordial’s approach: every action—whether submitting a transaction, modifying a policy, or requesting a software update —requires credentialed approval using secure authentication methods like WebAuthn or hardware security keys. Every request to the Cordial Treasury API requires signed messages with a WebAuthn credential and all actors in the chain receive the same message to review/sign to avoid man-in-the-middle attacks.
4. Independent Policy Enforcement Across Nodes
Enterprise resources should not be reachable without passing through a policy enforcement point. One might be tempted to store policies in a SQL database, however a true Zero Trust system requires independent policy enforcement. Many existing MPC SaaS vendors follow a centralized database approach with their customer policies (beware!). However, a SQL database will not have a way to respect your core MPC security threshold. There are many actors that can single handedly tamper data in a database, no matter how much you use MPC.
Cordial Treasury enforces transaction policy checks across multiple nodes, each independently validating rules and reaching consensus before anything is permitted. By proving a consensus, we can be sure there is no single actor or minority that is trying to break the policy. This prevents tampering and aligns with the principles of zero trust and operational resilience.
5. Minimized Vendor Trust Requirements
Most Wallets-as-a-Service (WaaS) platforms ask customers to outsource critical IT to third parties. However, a true Zero Trust approach demands a holistic evaluation of service providers—not just based on performance and stability, but also vendor security controls, switching costs, and supply chain risks. Critically, if you're generating transaction payloads, you should never rely on third parties (like a staking provider) to create them on your behalf.
Cordial Treasury was built from day one to be self-hosted. The institution creates its own key shares, enforces its own policies, and stores its own data. Cordial, as a vendor, has zero involvement in security-critical workflows. On the transaction creation side, the payload is created natively inside the system and doesn’t rely on trusted sub-vendors to perform this. Unfortunately, some MPC wallet solutions fall short of this standard and outsource this critical step.
6. Secure Key Generation and Distribution
One of the most overlooked Zero Trust risks in digital asset management is private key creation. SaaS wallet vendors often generate the key for you—forcing you to trust their entropy, randomness, and secure transport. In one notorious case, a tool called Profanity used a 32-bit vector to seed a 256-bit private key—leaving users vulnerable to brute-force attacks. If you’re using a SaaS wallet and you are comfortable with the key generation process, you still don’t know: does the vendor have a copy of my key? Can they block me in the signing processes? Can I still broadcast my transaction if the vendor is offline?
With Cordial, keys are generated and stored entirely within the customer’s infrastructure - obeying the CCSS “same actor” principle. The software code is source available so the enterprise can understand exactly how these security critical processes work. This is a model optimized for transparency and ensuring the customer understands where the residue of trust or risk can be found.
7. Data Sovereignty and Compliance Alignment
Zero Trust ensures that data is only stored, processed, and accessed in ways that align with jurisdictional, regulatory, and internal policies. This is especially relevant under frameworks like MiCA and DORA, which require strict operational controls. In countries like Turkey, where data residency laws require infrastructure to be hosted locally, using a U.S.-based or other foreign data center is not an option.
Cordial Treasury gives institutions full data sovereignty: all wallet data, logs, and configurations reside within the customer’s environment. This makes regulatory audits, record retention, and incident reporting far more robust.
8. Defense Against Insider Threats
Zero Trust isn’t just about external threats. It’s also about protecting against compromised users, rogue employees and insider threats, or accidental errors. While signing operations have long incorporated these principles, the same level of protection is often lacking for system administrators and others with “god privileges,” creating a critical point of failure.
Every action in Cordial Treasury—from transactions to policy edits and even updating the software itself —requires signed, credentialed authorization. Moreover, with multi-node deployments there is both a physical and logical security threshold. Distributing rights away from a single privileged actor helps with mitigating insider threats.
9. Built-In Recovery and Continuity
We’ve addressed Zero Trust in the context of identity—both human and machine—along with credentials, access, and management. But it must also extend to the hosting environment. For example, a clogged message queue in a multi-tenant SaaS wallet is unacceptable. The identity and access management system, along with the policy engine, should be designed for resilience, with built-in redundancy to handle partial outages. In worst-case scenarios, secure and immutable backups must be in place to enable full disaster recovery.
Cordial Treasury allows institutions to back up key shares and system state regularly, with the ability to rehydrate the entire infrastructure in a new environment in hours—not days. You can even test this process without vendor involvement.
10. Futureproofing Through Extensibility and Open Architecture
Zero Trust is not a one-time project—it's a long-term security strategy. As part of that strategy, it’s important to be cautious of proprietary, vendor-controlled APIs. These APIs can change without notice, causing compatibility issues for integrators. A better approach is to use well-designed, composable, and resource-oriented APIs, which give customers the flexibility to build solutions that align with their own business logic. In contrast, rigid, hardcoded workflows often fail to meet specific use cases and typically require custom engineering workarounds.
Cordial’s open-source crosschain library allows customer-side developers to add support for new blockchains quickly and securely. There is also scope to integrate your own identity provider, add your own RPC nodes, or validators, and much more. Reducing your reliance on Cordial Systems, as the vendor, as much as you would like.
Putting Zero Trust Into Practice
Zero Trust isn’t just a buzzword. It’s an operational necessity for digital asset institutions.
Cordial Systems is already delivering on that promise. Through its partnership with Dusk, Cordial provided Zero Trust custody infrastructure for RWA assets at NPEX— a European MTF licensed stock exchange bringing capital markets on-chain. An industry milestone proving that institutional-grade Zero Trust is not only possible, but already live in production.
As institutions scale their digital asset operations, the legacy trust assumptions of SaaS wallets and third-party providers will no longer hold. Zero Trust is the only model that supports real security, real compliance, and real control.
Learn more about Cordial Treasury and how to implement Zero Trust for your digital asset infrastructure. Get in touch with Cordial for a free advisory call today.
