Fix: BitBox02 & Passport PSBT Multisig “Keypath Mismatch” Revert

In institutional and high-security Bitcoin custody setups, multi-signature vaults (2-of-3 or 3-of-5 quorums) using dedicated hardware wallets—such as the BitBox02 Multi Edition, Foundation Passport, or Coldcard—provide supreme protection against single points of failure.

Coordinators like Sparrow Wallet, Specter Desktop, and Nunchuk orchestrate these transactions using PSBT (Partially Signed Bitcoin Transactions / BIP-174 & BIP-370).

However, when users attempt to finalize an outgoing transaction, the hardware wallet abruptly halts the process with a fatal rejection:

BitBox02 Signing Error:
  Status: 0x6a80 (INVALID_DATA)
  Message: Keypath mismatch for input #0: derivation path does not match registered multisig policy.

Or on the Foundation Passport:

Passport Security Alert:
  Invalid ScriptPubkey: Input #0 does not belong to the active multisig wallet descriptor.
  Signing aborted.

This error prevents cosigners from signing the PSBT, freezing corporate or personal Bitcoin reserves until the descriptor and keypaths are reconciled.

1. Technical Anatomy of Bitcoin Multisig Descriptors

Modern Bitcoin multi-signature architecture is governed by Output Descriptors (BIP-380 to BIP-386). A standard 2-of-3 Native SegWit vault is defined as:

$$\text{wsh}(\text{sortedmulti}(2, [\text{fp}_1 / 48’/0’/0’/2’]\text{xpub}_1, [\text{fp}_2 / 48’/0’/0’/2’]\text{xpub}_2, [\text{fp}_3 / 48’/0’/0’/2’]\text{xpub}_3))$$

Each cosigner entry in the descriptor requires three critical cryptographic parameters:

1. Master Key Fingerprint (fp): The first 4 bytes of the Hash160 of the master public key (e.g., 73c5da0a).
2. Derivation Sub-Path: The strict derivation branch under BIP-48:
   • m/48'/0'/0'/1' for Nested SegWit (P2SH-P2WSH).
   • m/48'/0'/0'/2' for Native SegWit (P2WSH).
   • m/48'/0'/0'/3' for Taproot Multisig (P2TR Musig2 / FROST).
3. Extended Public Key (xpub): The base58-encoded serialized key.

Why the Hardware Enclave Rejects the PSBT

Unlike software wallets, BitBox02 and Passport enforce strict on-device policy registration. Before signing an input, the device secure chip computes:

$$\text{ComputedScript} \stackrel{?}{=} \text{PSBT.Input[i].witness_script}$$

If any of the following discrepancies exist, the device aborts:

• The coordinator omitted the bip32_derivs map from the PSBT.
• The cosigners were sorted in a different lexical order (sortedmulti vs unsorted multi).
• The derivation path used by the coordinator differs by even a single index from what was approved during wallet creation.

(For related hardware derivation and balance synchronization issues, see our guide on Keystone 3 Pro BIP-84 & Taproot Gap Limit Zero Balance Fix).

2. Common Causes & Diagnostic Protocols

Cause A: Script Type Index Confusion (BIP-48 .../1' vs .../2')

The most frequent configuration error occurs when a user sets up a multisig in Sparrow choosing Native SegWit (P2WSH), but exports a key from the hardware wallet configured for Wrapped SegWit:

• Expected Path: m/48'/0'/0'/2'
• Provided Path: m/48'/0'/0'/1' When the PSBT is generated, the coordinator specifies m/48'/0'/0'/2'/0/0, which the BitBox02 or Passport rejects because its internal policy was registered under .../1'.

Cause B: Corrupted or Missing Master Fingerprints in Sparrow

If an extended key was imported into Sparrow Wallet manually via text copy-paste rather than USB / microSD import, the master fingerprint defaults to 00000000. The hardware device checks the PSBT’s input origin, fails to find its own genuine fingerprint, and throws Keypath mismatch.

3. Step-by-Step Remediation Protocols

Step 1: Inspect the Raw PSBT with Python hal or Bitcoin Core

Export your unsigned PSBT from Sparrow to a file (tx.psbt) and inspect the input metadata:

# Using bitcoin-cli to analyze PSBT
bitcoin-cli decodepsbt $(cat tx.psbt)

Look for the bip32_derivs section inside each input:

"bip32_derivs": [
  {
    "pubkey": "02f1a9...",
    "master_fingerprint": "73c5da0a",
    "path": "m/48'/0'/0'/2'/0/4"
  }
]

If master_fingerprint or path does not match your device’s exact hardware credentials, the PSBT cannot be signed.

Step 2: Re-Register the Multisig Descriptor on BitBox02

To resolve policy desynchronization on the BitBox02 Multi:

1. Connect your BitBox02 and unlock it via the BitBoxApp.
2. In Sparrow Wallet, go to Settings > Export > BitBox02 Multisig Configuration.
3. Save the .txt configuration file to a microSD card.
4. Insert the microSD card into the BitBox02.
5. In the BitBoxApp, go to Manage Device > Multisig Accounts > Load from SD card.
6. The BitBox02 screen will display:

   Register multisig:
   Name: SparrowVault
   Threshold: 2 of 3
   Checksum: [A7B9]

7. Verify and tap Confirm on the device touch sensors.

Once registered, the device recognizes future PSBTs originating from this descriptor.

Step 3: Re-Register Multisig Policy on Foundation Passport

If using the air-gapped camera on the Foundation Passport:

1. In Sparrow Wallet, click Settings.
2. Click the Export button in the lower-right corner.
3. Select Passport Multisig (QR Code).
4. On Passport, wake the device and navigate to Accounts > Add Account > Multisig > Import Descriptor.
5. Scan the QR code displayed on your Sparrow monitor.
6. Passport will verify all cosigner fingerprints and save the policy internally.
7. Return to the transaction screen and scan the PSBT animated QR code—Passport will now parse and sign the inputs without keypath errors.

4. Production Prevention Checklist

• Always verify that all cosigners use the exact same derivation standard (BIP-48 Native SegWit m/48'/0'/0'/2').
• Always verify that the coordinator specifies sortedmulti to ensure deterministic lexicographical key ordering.
• Never alter cosigner names or paths after receiving funds into a multisig vault.
• Backup the full textual descriptor: store paper/steel backups of the complete output descriptor alongside recovery seed phrases.