Coinbase Keeps 99% of Customer Funds Offline After $6.34B Binance Hack

Coinbase said more than 99% of customer assets are held in cold storage, limiting its exposure to the $6.34 billion Binance hot wallet hack. The US exchange maintains only small hot wallet balances to process customer deposits and withdrawals, while keeping the bulk of funds offline.

In a blog post detailing its security measures, Coinbase said its custody system uses secure multiparty computation (MPC) to distribute cryptographic signing authority among separate participants. Distributed signing keys, withdrawal limits, unusual activity detection and transaction-signing controls provide additional safeguards against failures of the type reported in the October 29 Binance incident.

The incident reportedly involved attackers accessing an internal wallet signing service and moving assets outside Binance’s normal withdrawal process. Coinbase said it was unaffected and did not lose customer funds.

Coinbase also stated that customers retain ownership of digital assets held through the exchange, with internal records tracking account balances and transactions. The company said it holds customer assets on a 1:1 basis and does not lend or use them without explicit customer instructions.

Coinbase previously faced a 2025 customer data breach that could cost up to $400 million, but said its cold-storage and MPC architecture are designed to protect customer assets from unauthorized access.