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

on November 1, on-chain researcher Zeeme (@0x_zeeme) posted a long thread on X analyzing why hackers could attack Binance, Bybit, and Bitget but struggle to breach Coinbase. He noted that Coinbase holds approximately 959,000 BTC, worth around $103.31 billion, and has not suffered such an attack in 14 years.

Zeeme stated that most exchanges concentrate billions of dollars into a few hot wallets for quick withdrawals; Coinbase, however, uses multi-party computation (MPC) technology, where 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 contrasted this by noting that in October, hackers breached a Binance DevOps engineer's computer, hijacked the hot wallet signature, and moved approximately $6.36 billion within 20 minutes; at Coinbase, even if an engineer's computer were compromised, attackers would only obtain a single useless shard of a key.

Additionally, Zeeme later clarified that the approximately 69.8 million addresses mentioned in the post are Coinbase's deposit addresses, not the wallets holding their funds, and that Coinbase maintains both hot and cold wallets.