Crypto exchanges tout cold storage ratios after Binance attack

Crypto exchanges were quick to reassure users following the attack on Binance’s hot wallet infrastructure last week, with several companies disclosing how they divide assets between cold storage and internet-connected hot wallets this week. 

Crypto exchange Gate on Thursday launched a “Proof of Security” (PoSEC) framework, reporting that 88.26% of its total assets were in cold storage and 11.74% in hot wallets. It claims its cold storage could cover 104.58% of customer assets even if its hot wallets were completely drained.

“By publicly disclosing the distribution of assets between platform cold storage and hot wallets, PoSEC provides visibility into asset storage structures and their ability to cover potential losses under extreme scenarios,” Gate said. It noted the data is still undergoing independent review by a third-party audit firm.

Threat actors attacked Binance’s hot-wallet infrastructure last week, stealing approximately $6.36 billion, most of it in about 20 minutes, according to TRM Labs. Binance CEO Richard Teng said the “vast majority” of user assets are held in cold wallets, but the company has not provided a precise split. 

Other crypto exchanges have been quick to share their cold storage ratios this week.