When it comes to your money, security is the number one priority. Keeping your money safe and secure, behind lock and key, is fast becoming a thing of the past. Cryptocurrency is fast becoming the new gold standard, and the cyber security around trading and safeguarding your investment is not something that is taken lightly. Insurance, personal account security, anti-theft, and hacking prevention are all measures than need to be in place to ensure your money is in the safest net on the web. In this review we are going to take a closer look at Coinbase, reviewing the safety and security measures that they offer their investors.
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Legitimacy of Coinbase
Coinbase is the largest Bitcoin exchange platform in the world today, and as of last year has been available in more than 30 countries across the globe. Backed by a host of wealth and trustworthy investors, including Reddit co-owner Alexiz Ohanian, the Bank of Tokyo, Digital Currency Group, and Blockchain Capital, Coinbase’s support is undeniable.
Operating within the United States, Coinbase is subject to adhere to certain rules and regulations, as well as regulatory bodies, to ensure the company:
- Complies with the Bank Secrecy Act
- Complies with the USA Patriot Act
- Complies with the state money transmission laws and regulations
- Is registered as a Money Services Business with FinCEN
Although these laws and regulations serve to supervise Coinbase while conducting business within the United States, none of the other countries where Coinbase operates requires these regulations.
Personal Account Security
Coinbase has a number of security check and options to safeguard their user’s personal account from unauthorized access or similar security breaches. A strong and unique password is highly recommended as well. Activity on a user’s account can also be tracked, and the user notified, whenever a new device or IP address attempts to gain access to the account.
Coinbase makes use of multiple 2-factor authentication methods to help make accounts more secure. The most basic being an SMS text option, creating the double layer security feature. Read more about Coinbase and security here.
Keeping Your Funds Safe
Keeping customer funds and company operational funds separate is the key here, and Coinbase does just that. Safeguarding their customer’s money in custodial bank accounts, ensuring their money is safe, even if Coinbase happens to become insolvent.
Coinbase claims that, “Even if Coinbase becomes insolvent, the funds held in custodial bank accounts could not be claimed by Coinbase or its creditors. The funds held in those accounts would be returnable to Coinbase’s customers.”
The vast majority (98%) of Coinbase customers’ cryptocurrency is stored in secure offline cold storage, stored on both paper and multiple hardware wallets. Physical cryptocurrency wallets are then moved and stored in safety deposit boxes and vaults around the world. This is a physical protection measure employed to prevent the funds being lost or stolen through hacking. The remaining 2% of the cryptocurrency is then stored online, and is fully insured by a syndicate of the banking giants Lloyd’s of London.
U.S. residents earn a little extra protection. Those making use of CoinBase’s USD wallet are covered for an additional maximum of $250,000, insured and covered by the FDIC.
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Be Careful Where You Send Funds
It is known that in the past Coinbase has applied certain restrictions on the allowed activity of users. Coinbase is known to track where their cryptocurrency is being sent and by which users, and has shut down accounts for certain purchases, including: sending cryptocurrency to gambling sites, send cryptocurrency to local bitcoins, and for making cryptocurrency purchases from the darknet.
From what you have read it should be quite clear that any cryptocurrency that you may have is going to be 100% safe and secure, and insured against any possible insolvency that Coinbase may face in the future. Their multiple 2-factor authentication methods add extra layers of personal protection, and offers great peace of mind when buying, storing, or exchanging cryptocurrency.