On-chain researcher: Coinbase uses MPC to split private keys, making it difficult for hackers to attack

On-chain researcher Zeeme posted a lengthy analysis on X, explaining why hackers can attack Binance, Bybit, and Bitget, but find it difficult to breach Coinbase. He stated that Coinbase holds approximately 959,000 BTC, valued at about $10.33 billion, and has not suffered such attacks in 14 years.

Zeeme indicated that most exchanges concentrate billions of dollars in a few hot wallets for quick withdrawals; however, Coinbase employs Multi-Party Computation (MPC) technology, ensuring that complete private keys never exist on disk or in memory. Each key is split into shards upon generation and stored on isolated hardware chips.

He compared this to an incident in October when hackers compromised a DevOps employee's computer at Binance and hijacked hot wallet signatures, transferring approximately $6.36 billion within 20 minutes. In contrast, at Coinbase, even if an engineer's computer is breached, only a useless shard of a key can be obtained.

Additionally, Zeeme later corrected that the approximately 69.8 million addresses mentioned in the post are Coinbase's deposit addresses, not the wallets where funds are stored. Coinbase also has both hot and cold wallets.