how is coinbase insured

Coinbase's multi-layered insurance policy provides up to $255 million in coverage for theft, fraud, and criminal acts, while its USD balances are protected by FDIC insurance for up to $250,000 per depositor.

Oct 29, 2024 at 09:20 am

How is Coinbase Insured?

Coinbase, one of the largest cryptocurrency exchanges in the world, takes a number of steps to protect its customers' assets, including providing insurance coverage. Here's how Coinbase is insured:

1. Cryptocurrency Insurance

Coinbase holds a commercial crime insurance policy that covers losses resulting from theft, fraud, or other criminal acts. This policy provides coverage for up to $255 million in losses.

2. FDIC Insurance (for USD Balances)

Coinbase's USD balances are held in US banks that are members of the Federal Deposit Insurance Corporation (FDIC). FDIC insurance covers up to $250,000 per depositor per bank, which means that Coinbase's customers are protected in the event that a bank fails.

3. Cold Storage

Coinbase stores the majority of its cryptocurrency assets in offline cold storage. This means that these assets are not connected to the internet, making them less vulnerable to hacking and theft.

4. Secure Custodian Relationships

Coinbase partners with a number of third-party custodians, such as Fireblocks and BitGo, to store its cryptocurrency assets. These custodians are responsible for securing and protecting these assets.

5. Regulatory Compliance

Coinbase is a regulated company that complies with all applicable laws and regulations. This includes adhering to anti-money laundering and know-your-customer (KYC) requirements, which help to prevent criminal activity and protect customer assets.

Additional Security Measures

In addition to insurance coverage, Coinbase also employs a number of other security measures to protect its customers' assets, including:

• Two-factor authentication
• Encrypted communication channels
• Regular security audits
• Incident response plans

By taking these steps, Coinbase provides its customers with a high level of protection for their cryptocurrency assets.