On-Chain Researcher: Coinbase Uses MPC to Split Private Keys, Making It Hard for Hackers to Strike

As reported by TechFlow, on November 1, on-chain researcher Zeeme (@0x_zeeme) posted a long analysis on X explaining why hackers were able to attack Binance, Bybit, and Bitget but struggled to breach Coinbase. He said Coinbase custodies approximately 959,000 BTC, worth about $103.31 billion, and has not suffered such an attack in 14 years.

Zeeme said most exchanges concentrate billions of dollars in a few hot wallets to enable fast withdrawals, while Coinbase uses multi-party computation (MPC) technology, where a complete private key never exists on disk or in memory; each key is split into shards upon generation and stored on isolated hardware chips.

He compared the incidents, noting that in October, hackers compromised the computer of a Binance DevOps employee and hijacked hot-wallet signing, moving about $6.36 billion within 20 minutes; at Coinbase, even if an engineer's computer were breached, they would only obtain a useless key shard.

Additionally, Zeeme later corrected that the approximately 69.8 million addresses mentioned in the post were Coinbase deposit addresses, not the wallets holding its funds, and that Coinbase also maintains hot and cold wallets.

Source: TechFlow