I am not sure there are enough trustworthy people whom it would not be insane to trust with this much money, and to not collude to try to steal the money.
BTC500 to be held by one single person? Definitely not. Not anyone. I think those funds are at risk.
7 people for a 4-of-7 multisig address so 4 signatures are required? Absolutely yes. Much less trust is required in that case.