Is Coinbase Safe? Is it Legit of Scam?
We’re confident you may have read in the news of unethical hacking and stealing of crypto coins. You may be wondering, Is Coinbase safe to give I.D.? These questions and more are becoming more relevant in today’s trading.
Coinbase was started in 2012 as a Bitcoin exchange platform initially. As time went on, the company grew and is arguably the largest crypto exchange platform in the United States. Coinbase now has over 2,700 workers on its payroll, transacting over $300 billion each quarter.
Although Coinbase has no headquarters as it is decentralized, it operates and manages the cryptocurrency framework of 9,000 diverse financial firms. With its users in more than 100 countries globally, the firm has a strong presence in those nations.
Coinbase also runs a mobile wallet to store your crypto coins. Is Coinbase wallet safe? Yes. Coinbase has a secure platform that ensures your investment is protected. In addition, the company is insured against a hack, a rare feature among cryptocurrency websites.
Is Coinbase Safe? How is Coinbase Protecting your Money?
Here are some reasons why we consider Coinbase a safe website.
The company manages the crypto infrastructure of 9,000 top financial businesses
Coinbase is insured in the event of a hack on any of its platforms.
It is backed by top investors, including the New York Stock Exchange
The company has a tight security framework that protects against anonymous transactions
It is regulated by top financial regulatory bodies in the United States.
How Do Governments Regulate Coinbase?
Some of the best regulatory bodies regulate Coinbase. They comply with the laws for each jurisdiction where they have a presence.
They have a license in many states in the United States, including New York, Michigan, Louisiana, Columbia, Connecticut, Colorado, West Virginia, Washington, Texas, New Mexico, and others. In many of these states, the crypto firm is licensed to offer money transaction services that cover U.S. Dollar Wallets and other transfer types.
The New York State Department of Financial Services regulates the services of Coinbase in the U.S. Among the regulation policies Coinbase includes:
The USA Patriot Act binds Coinbase to comply with laws, create control measures for compliance, review the policy regularly by appointing a compliance officer.
The individual states’ regulations and laws on money transmission and digital currency wallets
The Bank Secrecy Act mandates Coinbase to do a KYC for all its users, keep accurate and updated records of the customers and transactions for a maximum of 5 years, and report suspicious transactions.
Coinbase is also insured and regulated by the SEC. It stores less than 2% of its customer funds online and the rest in a cold offline storage format. The company’s insurance for funds extends only to cases of employees and cybersecurity attacks and theft. Password breaches on individual accounts are not insured. The FDIC insures up to $250,000 per individual Coinbase account.
If you are wondering, Is the Coinbase wallet safe? Yes, it is because the FDIC also ensures it. If you lose your password instantly, the insurance won’t be extended to that scenario.
Has Coinbase Had Any Security Compromises?
Yes. The company was compromised between March 2021 and May 2021. The hackers were able to get into the Coinbase security system, stealing cryptocurrencies from 6,000 users’ accounts. The hackers gained entrance through a minor flaw in the exchange’s two-factor authentication protocol.
Most of the customers were tricked into giving up their details, including their email addresses, passwords, and mobile numbers linked to their accounts.
The company, fortunately, began the process of refunding the amounts stolen by the hackers. The company also claims they have since repaired and corrected the flaw with hints that such may not occur again.
Is Coinbase Legal In My Country?
As stated, Coinbase is legal and supports close to 100 countries globally. They support countries in different locations, including South America, North America, Asia, Oceania, Africa, and Europe.
You can have a list on their website to see if Coinbase supports your country.
How Does Coinbase Work? All the Important DetailsCoinbase Security Rules
Coinbase has some security rules in place to protect against the loss of your funds. The first stage is that they store almost 98% of all users’ funds offline. They distribute the cryptocurrency to different places geographically for storage in safe deposit boxes and vaults.
The second policy is that all customers must use the 2-factor authorization system for their accounts in addition to a username and password. All the application details are stored on servers that are completed isolated from the internet. This measure is to prevent unlawful access to your account without the presence of your mobile device.
The company’s website is also protected with an encrypted SSL network, protecting their traffic from unwanted access. The wallets and private keys issued for their wallets are protected with AES-256 encryption.
On the company’s part, they ensure that all their employees pass through a background check as a crucial part of the hiring process. Their workers are also required to encrypt all hard drives and enable screen lock on their systems.
While these are the standard industry procedure, it is essential that you use a special, unique, and random password to protect your account. There are associated risks with trading cryptocurrency. It is important to protect access to your email and phone.
Coinbase Pros and Cons
Here are some of the advantages and disadvantages of using this cryptocurrency exchange.
👍 Pros
• All assets are stored in an offline cold storage
• Authentication details are stored in servers off the internet.
•They provide unique guides for beginners as well as training modules on how to trade
• They provide a vast range of cryptocurrencies to trade on.
• They are insured against theft and hack
• Their registration is fast and easy with the proper documents.
👎 Cons
• Their transaction charges are expensive.
• Their customer service is rated low by other users.
• There is no privacy on the platform.
Is Coinbase Good for Beginners?
Yes. This cryptocurrency platform is one of the best websites to trade bitcoin and other cryptocurrencies. They have a section dedicated to teaching crypto newbies on how to use their platform. If you are interested, they also offer a course on the fundamentals of cryptocurrency for a fee.
The Coinbase wallet is also one of the best crypto storage apps for use.
Summary
Coinbase is one of the popular cryptocurrency platforms for anyone to use. Their platform has been made simple for beginners starting out in the crypto space who need a simple outfit to buy and sell crypto coins. The company also has a separate wallet where beginners can store their assets away from the trading website. They are also regulated by a top financial regulatory body in the United States.
The top downsides of using this exchange are their exorbitant exchange fees and the poor customer service delivery. However, with their insurance against cyber hacks and thefts from employees, Coinbase is one of the best websites to do cryptocurrency transactions.
Top 10 Coinbase Reviews
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Comment
The platform's fees are notably high compared to other exchanges, eating into profits and making trading less attractive. Additionally, Coinbase's customer support can be slow and unresponsive. Overall, while Coinbase may be popular, its high fees, sluggish customer support, and limited coin offerings make it less than ideal for many traders.
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Comment
Coinbase does not withdraw money from the account!!! After 3 years of working with them, my account suddenly became suspicious ... The other day I tried to withdraw money and was refused! Support began to communicate terribly uncivilized, I don’t even know what to think....
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Reviews about Coinbase, in my opinion, speak for themselves. I have no confidence in these companies!
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The company does not comply with its own regulations! Promises one thing, does another. So you can't trade. You have to trust the company, and I can't do that.
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Comment
To begin with, Coinbase specializes in cryptocurrency trading only, so if you need other tools, Coinbase is definitely not your option. There is no demo account either, but with a $2 minimum deposit, this is forgivable. Moreover, several payment systems have been proposed for depositing funds, so there will definitely not be any problems. Education… Let's just say that I already know what is in Coinbase, as I have been trading for more than 5 years. But it will be useful for beginners. I consider Coinbase as a broker where you can learn how to trade, and then choose a broker according to your requirements. I’m talking about “learning to trade” literally: there are no investment offers in Coinbase. Only active cryptocurrency trading.
FAQs
What is the Minimum Amount to Deposit?
The minimum amount to deposit on Coinbase is $2. This amount can be deposited after opening and verifying your account.
Do I need to enable 2FA for my Coinbase Account?
Yes. Coinbase requires all account users to enable 2-factor authentication for their accounts before they are able to use it. This protects the account against unlawful access and hacking by internet criminals.
Is Coinbase Insured?
Yes. According to Coinbase’s legal page, all their assets are insured by the FDIC. The FDIC regulations require the company to take 98% of its customers’ funds offline for storage. The insurance also covers theft from cybersecurity threats and employees.
How Long Does A Withdrawal From Coinbase Take?
A withdrawal from Coinbase takes between 24-72 hours for processing. It usually occurs instantly within an hour. However, the withdrawal request may take longer if it looks suspicious to the company.
Team that worked on the article
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).