# Why Ketju rejected Merlin's Seal (Merlin Chain)

- URL: https://riadefi.com/rejections/merlins-seal/
- Exposure: other
- Memo version: v1
- Reviewed: 2026-08-17
- Next review: 2026-11-17

## The memo

REJECTED ON A THINNER APPROVAL SET THAN EVERY COMPARABLE BITCOIN WRAPPER ALREADY REJECTED IN THIS REGISTRY. Merlin's Seal is the BTC-locking bridge for Merlin Chain, a Bitcoin Layer 2, using MPC custody co-managed by Cobo and Merlin Chain that requires both parties' signatures to release funds. That two-party gate is smaller than WBTC's 2-of-3 multisig or Function FBTC's three-party Security Council, both already rejected in this registry for their own custody-concentration reasons, and current redemption mechanics for ordinary, non-promotional bridge transactions could not be confirmed from primary sources.

## What would reopen the file

- The MPC custody threshold expands beyond a two-party gate to a broader, named signer set, or an independent third-party verifier is added to the release process
- Current redemption mechanism, timing, and any size limits for ordinary bridge transactions are independently confirmed and demonstrated at proposed size
- An independent, recurring proof-of-reserves attestation for MBTC and other Seal-bridged assets is published
- Twelve consecutive months with no depeg, custody, or bridge-release incident following threshold and redemption confirmation

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Published by Ketju Research (https://ketjuresearch.com). Educational analysis only; not legal, tax, compliance, or investment advice.
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