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Coinbase Says 99% of Customer Crypto Is Offline and Out of Hackers’ Reach
Coinbase says more than 99% of customer crypto is kept in offline cold storage, after a major hack at rival exchange Binance raised questions about security. The exchange says its layered controls are designed to limit how quickly funds can move online and to prevent a single compromised employee account from authorising transfers.
Cold-wallet keys are split into pieces, unusual withdrawal surges are reviewed by staff, and Coinbase can take signing keys offline. It says customer assets are held one-for-one and are not lent out without customers’ direction; as of 30 September, it reported $8.6 billion in cash and equivalents and $377 billion in assets on its platform. Binance lost about $6.4 billion, while Coinbase has also recently disclosed separate incidents involving customer data, though neither affected customer funds.
In short
- Coinbase says over 99% of customer crypto is held offline.
- Multiple controls are intended to slow or stop suspicious transfers.
- Binance’s reported $6.4 billion hack has heightened industry scrutiny.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Keeping most customer crypto offline, splitting signing keys and adding human review can reduce the chance that a remote attacker or a single compromised account can move funds quickly. Coinbase’s reported one-for-one backing and substantial cash reserves may also reassure customers that assets are available, while its disclosures about data incidents give customers information to weigh when assessing its safeguards.
The case against
Cold storage and layered approvals can lower risk, but they cannot eliminate it: security depends on how the controls are implemented, maintained and tested, and the exchange still manages the keys and withdrawal process. Coinbase’s figures are company-reported snapshots, and its disclosures of customer-data incidents underline that safeguards can fail; customers may therefore question whether such claims alone demonstrate that their assets are out of hackers’ reach.
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