Crypto exchanges should set explicit dollar limits on assets held in hot wallets rather than assess security solely by the share kept in cold storage, according to CertiK’s research team. TechFlow relayed the recommendation on November 10, 2026, citing Cointelegraph.
Limits tied to liabilities and loss capacity
The team recommended setting separate hot-wallet limits for each asset and blockchain. Exchanges should apply the strictest of three constraints:
- A limit based on a proportion of customer liabilities.
- A limit based on expected withdrawal demand.
- An absolute loss ceiling determined by the exchange’s financial resources and recovery capacity.
CertiK also recommended circuit breakers to help contain potential losses.
Why a cold-storage ratio is not enough
According to CertiK, cold-storage ratios can help measure online exposure but cannot serve as a standalone security score. Overly rigid storage ratios can also slow withdrawals, force exchanges to move funds hurriedly and concentrate risk in key-management systems.
The recommendation therefore links hot-wallet exposure to customer obligations, withdrawal needs and the exchange’s capacity to absorb and recover from losses, rather than relying on a storage percentage alone.
Original publication: November 10, 2026, at 13:17:44 (UTC+8).
Source: TechFlow, citing Cointelegraph.