TheBlock
Coinbase says more than 99% of customer assets are held in cold storage, with distributed private keys, withdrawal limits and anomaly detection among its safeguards. The exchange said it was not affected by Binance's $6.3 billion breach on Oct. 29 and that customer assets are held 1:1, remain customers' property and are not lent or used without authorization.
Why it matters
The breach has put exchange custody practices and response plans under scrutiny. Coinbase says it will continue investing in security as AI changes the threat landscape. Binance said hackers used a fake job interview and an internal AI tool to assist the attack. Coinbase's safeguards and Binance's account of the breach show why protecting credentials and monitoring for unusual transfers remain central to exchange security.
Binance cofounder and former CEO Changpeng Zhao called for AI-based defenses and an industry alliance to share lessons and freeze stolen funds faster. He said coordinated action could help exchanges respond to attacks across the industry.
Market impact
Binance said it has replenished approximately 98% of the assets affected by the breach and is acquiring the remaining 2% through market and over-the-counter channels. It said lower liquidity is slowing those purchases. The exchange also expanded Proof of Reserves coverage from 10 tokens to 44; generating the new zero-knowledge proof is expected to take 50 to 60 hours.
For customers and the broader market, the incident puts both security controls and recovery measures in focus. The remaining replenishment and the expanded reserves disclosure are concrete next points to track, alongside how exchanges adapt defenses to AI-enabled threats.
Frequently asked questions
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What safeguards does Coinbase say it uses to protect customer assets?
Coinbase says it keeps more than 99% of customer assets in cold storage and uses distributed private keys, withdrawal limits and anomaly detection.
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What did Coinbase say about customer ownership and the Binance breach?
Coinbase said it was not affected by the breach and that customer assets are held 1:1, remain customers' property and are not lent or used without authorization.
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How much of the assets affected by the breach has Binance replenished?
Binance said it has replenished approximately 98% and is acquiring the remaining 2% through market and over-the-counter channels.
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Why is Binance taking longer to acquire the remaining affected assets?
Binance said lower liquidity is slowing its purchases of the remaining 2% through market and over-the-counter channels.
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How has Binance expanded its Proof of Reserves coverage?
Binance expanded coverage from 10 tokens to 44. The exchange said generating the new zero-knowledge proof is expected to take 50 to 60 hours.
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