Coinbase: Over 99% of Customer Assets Stored in Cold Wallets Recent security incidents at exchanges have raised concerns among investors about asset security. Coinbase has issued a statement regarding its asset custody and security measures. Coinbase states that the platform holds customer assets on a 1:1 basis and will not lend or misappropriate them without customer authorization. Over 99% of customer assets are stored in offline cold wallets, with only a small amount remaining in hot wallets to meet users' daily withdrawal needs. PS: Most exchanges currently use similar solutions. Regarding the protection of cold wallets, Coinbase states that private keys are split and stored in a distributed manner, and are not reassembled into a complete private key even when signing transactions. Transfers from cold wallets to hot wallets are subject to limits and anomaly detection. Any anomalies are investigated, and in emergencies, the platform can suspend some or all fund transfers. As of September 30, 2026, Coinbase had $8.6 billion in cash and cash equivalents, and approximately $377 billion in assets held or managed on behalf of users. In addition to wallet security, Coinbase also uses AI to test code, applications, and infrastructure, and uses smart contract auditing tools to find vulnerabilities. For user transfers, the platform states it assesses the risk of on-chain addresses and sets up anti-fraud prompts and tests before large or high-risk off-exchange transfers. PS2: Personally, I used to complain quite a bit about Coinbase at one point, because both incoming and outgoing funds required more than two verifications just for the address or bank account. Initially, I was quite resistant, thinking it was unnecessary, but in the long run, Coinbase has essentially integrated a whitelist mechanism with fund transfers. Currently, I personally use the whitelist option on several major exchanges; only those on the whitelist can transfer funds.