Coinbase said last week’s hack of Binance did not affect its customers and used the incident to outline how it stores and protects client crypto. The company said more than 99% of customer assets are kept in offline cold storage, with only the amount needed for expected withdrawals moved into internet-connected hot wallets.

In a blog post, the U.S. exchange said customer assets are held 1:1 and described a series of custody controls aimed at blocking unauthorized transfers. It also pointed to artificial intelligence as a rapidly evolving security risk for the industry.

Cold storage remains the core defense

According to Coinbase, the bulk of customer crypto is stored offline and therefore kept out of reach of remote attackers. The company said it transfers funds into hot wallets only as customers need them, limiting the amount exposed to online systems at any given time.

Coinbase said this approach is part of a broader custody model in which customer assets are fully backed on a one-to-one basis. The company framed that structure as a key part of its protection strategy following the Binance breach.

How Coinbase says key access is restricted

The exchange said the private keys controlling its cold wallets are split into separate pieces and are never fully reassembled, including during the signing process. That design is meant to reduce the risk that a single compromise could expose an entire wallet.

For hot-wallet operations, Coinbase said no single employee has standing access to the signing service. Sensitive actions require multiple approvals, and the company said its controls are intended to stop stolen passwords, hijacked sessions, or compromised devices from being enough on their own to authorize critical activity.

Withdrawal checks and emergency shutdown options

Coinbase also described limits on withdrawals and automated anomaly detection intended to catch suspicious activity. If withdrawal requests spike in unusual ways, the company said staff review is required before activity can proceed.

The exchange added that it has kill switches capable of taking signing keys offline entirely if needed. Those measures, it said, are designed to contain damage quickly if systems detect behavior that falls outside normal patterns.

What Coinbase is highlighting after the Binance breach

The company’s comments came in direct response to last week’s Binance hack, which Coinbase said had no impact on its own platform or customers. Rather than reporting a separate incident, Coinbase used the moment to explain the layers of protection it says are already in place.

The next confirmed development is Coinbase’s continued emphasis on emerging threats, particularly AI, which it described as a fast-changing security challenge. While the company did not announce a new policy tied to AI, it signaled that the risk landscape around exchange security is continuing to evolve.

Source: decrypt.co