Multi-Party Computation - Threshold Signature Scheme (MPC-TSS) enhances security in exchange hot wallets by distributing private key shards across multiple parties. However, vulnerabilities in key shard management pose significant risks. Verichains’ TSSHOCK attacks revealed critical flaws in t-ECDSA implementations, allowing malicious signers to extract full private keys covertly, potentially compromising billions in assets. Issues like inadequate key refresh mechanisms and poor shard distribution increase exposure to collusion or theft. While MPC-TSS eliminates single points of failure, its complexity demands robust auditing and proactive security measures. Exchanges must prioritize frequent key rotations, secure shard storage, and rigorous protocol vetting to mitigate these vulnerabilities and ensure the integrity of hot wallet operations.