Binance employs a hybrid wallet strategy, keeping the majority of user funds in cold storage for maximum security while using hot wallets for operational efficiency.Cold Storage PracticesBinance stores over 90-95% of assets in cold wallets, which are offline hardware devices or air-gapped systems disconnected from the internet. This minimizes hacking risks, with private keys generated and managed securely using multi-signature protocols requiring multiple approvals for access. Regular Proof of Reserves audits verify these holdings transparently.���Hot Wallet PracticesHot wallets hold a small portion (5-10%) of funds for daily trading, withdrawals, and liquidity needs, connected to the internet for quick access. These are protected by real-time monitoring, two-factor authentication, withdrawal whitelisting, and anomaly detection systems. Binance limits hot wallet balances to reduce potential losses from any breach.���Overall Security BalanceThis cold-heavy approach, backed by the SAFU fund, has prevented major user losses since platform enhancements. Users should still enable personal security features and avoid long-term large deposits on any exchange.��
