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first_img CertiK suggests that exchanges set a USD limit for hot wallets

The cybersecurity company CertiK recommends that cryptocurrency exchanges set a hard dollar limit on hot wallet holdings, rather than relying solely on cold storage ratios to measure security. This recommendation comes at a time when several exchanges have recently disclosed their cold wallet holdings ratios to reassure customers, following a record hack of Binance's hot wallet. Gate reports that 88.26% of its total assets are stored in cold storage, while Coinbase states that over 99% of customer assets are kept offline.The CertiK research team told Cointelegraph that cold storage is an effective indicator of online risk exposure, but it is not an independent security rating. Currently, South Korea requires crypto service providers to store at least 80% of the value of customer crypto assets in cold storage, Singapore's guidelines require at least 90%, Japan's framework requires at least 95%, and the benchmark for licensed crypto trading platforms in Hong Kong is 98%. CertiK points out that higher levels of cold storage generally reduce online risk exposure, but at extremely high levels, the returns diminish, and a rigid storage ratio may slow down withdrawals, force hasty transfers, and concentrate risks in the key management system.CertiK suggests that exchanges set hot wallet limits for each asset and blockchain based on the most stringent of three restrictions: the percentage of customer liabilities, estimated withdrawal demand, and an absolute loss limit based on the exchange's financial resources and recovery capabilities. Additionally, Binance stated last week that it has replenished about 98% of the affected tokens after the hack and absorbed the losses itself, with the remaining tokens having lower liquidity and longer acquisition times. Elliptic reported that hackers linked to North Korea laundered money by issuing memecoins, transferring about $430,000 through six newly issued tokens on NEAR.
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