Coinbase Details Offline Custody After Binance’s Multibillion-Dollar Hack
What happened: Coinbase said on November 4 that more than 99% of customer crypto is held in offline cold storage and that it was unaffected by Binance’s October 29 breach, whose reported losses range
What happened: Coinbase said on November 4 that more than 99% of customer crypto is held in offline cold storage and that it was unaffected by Binance’s October 29 breach, whose reported losses range from $6.3 billion to $6.4 billion. Its disclosed controls include split private keys that are never fully reassembled, kill switches that take signing keys offline, strict transfer limits and no single employee with standing hot-wallet signing access. Coinbase also said customer assets are held 1:1 and are not lent without authorization; the supplied research lists $8.6 billion in cash and equivalents as of September 30 and $377 billion in platform assets.
Why it matters: The disclosure gives customers concrete custody practices to evaluate, but the percentage remains Coinbase’s own statement rather than an independently verified, real-time measure of security. Offline storage addresses exposure without establishing that transaction approval processes are invulnerable, and the cash and platform-asset figures describe different categories rather than an interchangeable pool available to cover losses. The useful question is how the disclosed controls work together when a transfer is requested, particularly as Coinbase identifies advancing AI capabilities as a changing security concern.
Reporting on the same episode said Binance had replenished approximately 98% of affected assets by November 4 and expanded its Proof of Reserves coverage to 44 tokens from 10. Those recovery measures provide context for Coinbase’s reassurance, although replenishment and reserve reporting do not themselves explain whether the original intrusion path has been eliminated.