Coinbase highlights cold-storage safeguards after Binance breach rocks crypto sector

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Coinbase cold-storage safeguards

Highlights

Coinbase reports over 99% of customer assets in cold storage, with distributed private keys, withdrawal limits, and anomaly detection for enhanced security.
Binance, hit by a $6.3 billion exploit on Oct. 29, has replenished about 98% of the affected assets and expanded Proof of Reserves coverage to 44 tokens.
Binance's new zero-knowledge proof will require 50 to 60 hours to generate, as the company addresses liquidity and security challenges following the incident.

Coinbase details custody and defense measures

As reported by The Block, citing Coinbase, in a blog post published Wednesday, the U.S. crypto exchange says customer assets are held 1:1, remain customer property, and are not lent or used without customer authorization.

The company says it keeps more than 99% of customer assets in cold storage and uses distributed private keys, withdrawal limits, and anomaly detection to protect funds from unauthorized transfers. Coinbase also says the rapid advancement of AI capabilities is changing the security landscape, and that it will continue to invest in what it calls best-in-class security innovation.

Binance recovery efforts and wider industry implications

Binance says it was exploited for $6.3 billion on Oct. 29, marking one of the sector's biggest security incidents. The exchange said Tuesday that it has replenished about 98% of the affected assets and expanded its Proof of Reserves coverage to 44 tokens from 10 previously.

According to Binance, the remaining 2% of assets is being acquired through market and over-the-counter channels, with purchases taking longer because of lower liquidity. The exchange also says its new zero-knowledge proof is expected to take 50 to 60 hours to generate.

Binance cofounder and former CEO Changpeng "CZ" Zhao says crypto companies need AI-based defenses and an industry alliance to share lessons and freeze stolen funds faster. His comments add to growing pressure on exchanges to strengthen custody, monitoring, and incident-response systems as security risks across digital assets evolve.

In our earlier report on the Bank of England’s push for “bare metal” recovery planning, we explained how regulators are urging major banks to prepare for deeper, AI-amplified cyber incidents by ensuring critical services can be restored even if primary systems are compromised. The article highlighted the shift from relying on perimeter defenses alone to building end-to-end resilience, including independent fallback systems and stronger recovery playbooks across the financial system.

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