A widely used method that crypto exchanges rely on to generate deposit addresses while keeping private keys offline could break if blockchains migrate to post-quantum cryptography, according to new research.

Exchanges such as Coinbase and Binance currently rely on hierarchical deterministic wallets, a system standardized under Bitcoin Improvement Proposal 32, or BIP32. 

The design allows operators to generate fresh deposit addresses from a public key stored on a server while the private signing key remains offline in cold storage.

That separation is foundational to how custodial crypto infrastructure works, enabling exchanges to create addresses on demand without exposing the keys that control customer funds.

But researchers at Project…