[icebraining]

Physical intrusions can be dealt with by encrypting the keys, which I hope they are doing. Using a secret sharing scheme with physical tokens (e.g. smartcards) carried by chosen employees should reduce the danger of both of those attacks.

[TheMakeA]

They claim the physical copies are encrypted [1].

[1] http://blog.coinbase.com/post/33197656699/coinbase-now-stori...