- Coinbase says more than 99% of its customer assets are held in cold storage, with additional security measures to prevent unauthorised transfers.
- The exchange said customer assets are held on a 1:1 basis and are not lent or used without customer permission.
- The statement follows Binance’s $6.3 billion security breach on October 29. Binance has since replenished around 98% of the affected assets.
Coinbase Highlights Its Crypto Security Measures
Crypto exchange Coinbase has stated that over 99% of customer assets are stored in “cold wallets”. In a blog post published on Wednesday, Coinbase stated that the US-based exchange uses distributed key cryptography, withdrawal limits and monitoring tools to secure customer funds.
Binance’s reported hot wallet incident has understandably left customers asking how Coinbase protects customer assets from something similar happening here.
Here are five key measures we take to safeguard the $375+ billion of assets on the Coinbase platform:
1. Keeping most assets offline: Over 99% of customer assets are held in cold storage.
2. Applying protections to how assets move: To help verify that fund movements match their intended purpose we use multiple layers of protection including distributed key protection, rate limits, anomaly detection, and kill switches.
3. Holding all customer assets 1:1. We never lend or use those assets unless customers instruct us to.
4. Employing an industry-leading security team. Coinbase is held to the standards of the largest financial institutions: Our U.S. custodian is a fiduciary under New York law, and in Europe Coinbase is authorized under MiCA and supervised by Luxembourg’s CSSF.
5. Continuously improving safeguards and monitoring for threats: AI is rapidly changing the security landscape, and, in response, Coinbase will continue to invest in best-in-class security innovation.
Learn more about how we protect customer assets ↓
— Coinbase Institutional 🛡️ (@CoinbaseInsto) November 5, 2026
The exchange confirmed that it was unaffected by the Binance incident and that customer funds are held in a one-to-one ratio. “Cold Storage” refers to storing crypto in wallets that are offline. This decreases the chances of hackers directly accessing funds.
Customer funds are also not loaned or used, they remain the asset of the customer. Coinbase states that it constantly improves its security protocols.
$6.3 Billion Security Breach At Binance
This comes after the world’s largest crypto exchange suffered a huge security breach on October 29, losing around $6.3 billion. The attack was carried out using a fake job interview and an internal AI tool. Binance stated this on Tuesday and has brought concerns about the security of cryptocurrency exchanges to light again.
The rise of AI is changing the security landscape, Coinbase stated. Exchanges will have to continue investing in high level security protocols.
Former CEO and co-founder of Binance said that there should be increased collaboration between crypto companies. He said that exchanges should implement AI driven security protocols. “Exchanges should adopt AI-driven security protocols, and work together to increase information sharing and faster freezing of stolen assets.”
Binance Restores 98% Of Assets
On Wednesday, Binance stated that it had restored around 98% of its assets affected. It also increased its Proof of Reserves coverage to 44 tokens.
The exchange is working to restore the final 2% using market buys and OTCs but it is taking longer due to some of the assets having less liquidity. Binance also stated that its new zero knowledge proof system will take between 50-60 hours to produce.
This shows just how much security has become a concern for crypto exchanges. Although there are ways to reduce risk such as using cold storage, it shows that exchanges will need to constantly improve their protocols to protect against increasingly complex attacks.
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