Does Coinbase provide insurance to protect user funds?

Key Points:

• Coinbase offers two types of insurance to protect user funds: FDIC insurance for USD fiat currency and custody insurance for crypto assets.
• Both types of insurance have coverage limits and exclusions.
• Coinbase Custody Trust, a separate legal entity, holds user crypto assets in cold storage facilities.

Coinbase's Insurance CoverageFDIC Insurance for USD Fiat Currency:

• Coinbase custodies USD fiat currency accounts at FDIC-member banks in accordance with banking regulations.
• FDIC insurance covers deposits up to $250,000 per depositor, per FDIC-insured bank.
• This coverage is provided at no additional cost to Coinbase users.

Custody Insurance for Crypto Assets:

• Coinbase Custody Trust holds user crypto assets in offline cold storage vaults, which provide enhanced security against cyberattacks.
• Custody insurance protects crypto assets against theft or loss due to security breaches or employee fraud.
• The coverage limit for custody insurance is determined by the value of the assets held in Coinbase Custody Trust.

Coverage Limits and ExclusionsUSD Fiat Currency:

• Coverage is limited to $250,000 per depositor, per FDIC-insured bank.
• Exclusions include losses due to unauthorized transactions or fraud.

Crypto Assets:

• Coverage limits vary based on the value of assets stored in Coinbase Custody Trust.
• Exclusions include losses due to market volatility, forks or changes to blockchain protocols, and unauthorized transactions.

Coinbase Custody Trust

• Coinbase Custody Trust is a Delaware-chartered trust company that acts as the custodian for user crypto assets.
• It operates independently from Coinbase, with separate management and accounting.
• The trust's assets are held in cold storage facilities, which are physically secure and not connected to the internet.

How to Access Insurance Coverage

• Users who hold USD fiat currency in Coinbase accounts will automatically benefit from FDIC insurance without any additional steps.
• Users who store crypto assets in Coinbase Custody Trust will be subject to the terms and conditions of the custody insurance policy.

FAQsQ: Is Coinbase a safe place to store my cryptocurrency?

A: Coinbase employs a combination of security measures, including FDIC insurance for USD fiat currency and custody insurance for crypto assets, to protect user funds.

Q: What types of crypto assets are covered by Coinbase Custody Trust's insurance?

A: Coinbase Custody Trust covers a wide range of crypto assets, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and other popular digital currencies.

Q: Can I lose money on Coinbase even if it is insured?

A: Insurance policies have limitations and exclusions. For example, losses due to market volatility or unauthorized transactions are typically not covered.

Q: How can I file a claim for lost or stolen crypto assets?

A: Users who have lost or stolen crypto assets should contact Coinbase's support team for assistance. Details on how to file a claim will vary depending on the specific circumstances.

Q: Can I withdraw my crypto assets from Coinbase Custody Trust?

A: Yes, users can withdraw their crypto assets from Coinbase Custody Trust at any time. The withdrawal process may involve a delay or fee, depending on the asset and the amount being withdrawn.