Coinbase says over 99% of customer assets sit in cold storage

Coinbase said more than 99% of its customers' assets are held in cold storage and that its systems and customer funds were unaffected by the Oct. 29 Binance hack. The exchange published the blog post on Wednesday, Nov. 4, at about 11:58 a.m. ET, as reported by The Block, crypto.news and Bitcoin.com.

Details

In its post, Coinbase lays out how its custody works. Cold-storage private keys are split into pieces that are never reassembled when a transaction is signed. Movement from cold to hot wallets is rate-limited, and the small hot-wallet balance kept for withdrawals is continuously swept back to cold storage.

An automated anomaly-detection system halts suspicious withdrawals while security staff investigate. If needed, signing can be shut off entirely by taking keys offline. No single employee has standing access to the production signing service, and sensitive changes need approval from several people.

Coinbase says customer assets are held 1:1, remain customer property and are not lent or used without authorization. The 99% figure is the exchange's own and not independently verified, Bitcoin.com notes, adding that Coinbase publishes SOC 1 and SOC 2 Type II reports and is overseen by the SEC and NYDFS.

Binance's own incident report says the attack began with a fake job interview of an engineer and drained funds from hot wallets.

What this means for the market

After a record exchange hack, rivals are moving to show how client funds are protected. For users, verifiability matters more than assurances: audit reports and proof of reserves carry more weight. We track how Binance is restoring withdrawals in a separate note.

For the bitcoin price, see the daily brief. This is not investment advice.