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

On-chain researcher Zeeme (@0x_zeeme) published an analysis on X on November 1 explaining why hackers have breached Binance, Bybit, and Bitget but not Coinbase, which custodies roughly 959,000 BTC worth about $103.31 billion and has avoided such attacks for 14 years. Zeeme attributes this to Coinbase's use of multi-party computation (MPC), under which complete private keys never exist on disk or in memory and each key is split into shards stored on isolated hardware chips, whereas most exchanges concentrate billions of dollars in a small number of hot wallets for fast withdrawals. As a comparison, he cited an October incident in which hackers compromised a Binance DevOps employee's computer, hijacked hot wallet signing, and drained roughly $6.36 billion within 20 minutes; at Coinbase, even a compromised engineer's machine would yield only a single useless key shard. Zeeme later corrected that the ~69.8 million addresses mentioned in the post are Coinbase deposit addresses rather than the wallets holding its funds, noting Coinbase also maintains hot and cold wallets. The analysis highlights custody architecture as a key differentiator in exchange security, and watchers should track whether other exchanges adopt MPC-style key sharding and how Coinbase's cold/hot wallet structure evolves.