The hack is publicized for at least a hour, but from reporting I saw they still continue to drain funds as for now. I wonder why large CEX do not have any safety measures for this kind of hacks, they could withdraw everything to newly generated wallets and minimize damage that way. It is certainly not the first time CEX wallets get hacked.

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drum55 2 hours ago | parent | next [-]

You don’t even have to do that, have deposits go to offline keys directly, that way there’s only ever cold > hot wallet movement and a big deposit can’t cause your hot wallet to be too risky.

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darkwi11ow 2 hours ago | parent | next [-]

The point of cold wallet is to minimize movements, if there is high frequency of funds moved from a wallet then it is likely can not be called cold any more. Plus CEX in any case still needs to have large buffer of funds on some wallet to support day trading.

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nostrademons an hour ago | parent [-]

You can move money into a crypto wallet without that wallet needing to do anything, or being online at all, or even having a private key that physically exists anywhere in the universe. It's just a public/private keypair; send it to the public key of a private key that's offline and it still exists on the blockchain, you just can't do anything until the matching private key comes online.

The point of a cold wallet is to keep the private key physically offline. That way you know it cannot be stolen by electronic means, because the physical device containing the key needed to authorize transactions is locked up and not powered on. Then you only power it on during very specific, audited times and conditions when it's needed to fund the hot wallet, which does all the actual automated trading and transfers.

GP's point is to have all incoming transactions to an exchange go to a cold wallet, which becomes a one-way sink, and then periodically the exchange powers up the cold wallet to sign transactions transferring assets to the hot wallet, which then funds all outgoing transactions. This isn't a bad architecture, though I'm not sure it'd save all that much here.

	▲	bombcar 30 minutes ago \| parent [-]
		I was taking it that your bitcoin bank would have a SHTF lever that would immediately dump ALL your hot wallets into an offline cold-wallet. Then when things calm down you go and find ... the keys under the birdbath are lost, and you're fucked in a different way. But at least it might work.

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lxgr 19 minutes ago | parent | prev [-]

For a large CEX like Binance, $5B might just qualify as a hot wallet.

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vessenes an hour ago | parent | prev [-]

There are lots of measures in place at these exchanges - the rub is that cold storage is by design slow. To service withdrawal requests in a timely fashion a percent is kept “warm” or hot and used to process withdrawals. Usually this is where the leaks happen.