Coinbase said Wednesday that more than 99% of customer assets are held in cold storage, outlining its security measures following the $6.3 billion hack at rival exchange Binance last week.
In a security update, Coinbase said its systems and customer funds were unaffected by the breach. The exchange keeps a small portion of assets in internet-connected hot wallets to process withdrawals, while continuously transferring excess balances into offline storage.
Security Infrastructure
The company said its wallet infrastructure uses distributed private keys, multiple approval requirements and withdrawal limits to prevent unauthorized transfers. Its security systems also monitor unusual transaction activity and can halt wallet signing operations when suspicious behavior is detected.
Coinbase added that no single employee has standing access to its production wallet signing service, while sensitive changes require approval from multiple personnel. The company also uses additional authentication measures to reduce risks from compromised employee devices or credentials.
Customer Asset Protections
The exchange reiterated that customer assets are held at a 1:1 ratio and remain customer property, with funds neither lent nor used without customer instructions.
As of September 30, Coinbase reported $377 billion in assets on its platform, alongside $8.6 billion in cash and cash equivalents and $2.2 billion in crypto assets held for investment.
Binance Breach Aftermath
The statement follows the October 29 Binance attack, which resulted in approximately $6.34 billion in stolen crypto assets. Binance said Wednesday it had replenished 98% of the affected assets using its own resources and expanded its proof of reserves coverage to 44 cryptocurrencies.
