How Trustworthy Is Coinbase?

Founded three years after the creation of bitcoin in 2009, Coinbase has grown to become one of the largest and most trusted cryptocurrency trading and investing platforms.

The crypto company boasts more than 2,700 employees worldwide, operations in more than 100 countries, 56 million verified users, $255 billion in assets, and roughly 34,00 ecosystem partners across the world.

In addition to trading cryptocurrency, Coinbase also offers a range of investment options including commerce services and crypto storage.

Despite being famous, many may wonder if the broker is legitimate considering the volatility and risky nature of cryptocurrencies.  

In this post, we discuss whether Coinbase is a legit platform or not.

Is Coinbase Legit?

There are a lot of exchanges and brokers on the market that are not as trustworthy as they claim to be.

Coinbase however is a legitimate cryptocurrency exchange and a broker. Here are some features that make this cryptocurrency exchange trustworthy.

Licencing

Coinbase is licenced to engage in the money transmission and cryptocurrency wallets and transfers both in the United States and other jurisdictions.

In the U.S. alone, the broker operates in 30 states but holds over 40 different licences.

These licences ensure that Coinbase complies with financial services and consumer protection laws.

These laws include the USA Patriot Act which requires the company to have a compliance officer that creates procedures and ensures control compliance.

Another law is the Bank Secrecy Act which requires platforms to verify customer transactions and maintain transaction records up to five years.      

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The platform’s international operations are regulated by the Financial Conduct Authority.

Some jurisdictions require licences to operate the digital currency and Coinbase is committed to obtaining needed regulations to comply with the law.

Security

Coinbase takes careful measures to ensure that your crypto is as safe as possible. To guarantee safety, 98% of customers’ funds are stored offline.

Unlike online storage, storing funds offline reduces the risk of theft or loss. The cryptocurrencies are distributed geographically in vaults and safe deposit boxes around the world.

Data privacy

Protecting client data and privacy should be a priority for any company offering financial services. Coinbase ensures that it keeps you informed of how and why it collects and uses your personal information.  

The broker only collects personal information that is necessary to provide you with its services.

This includes data mandated by law and data to enable and improve certain services.

However, you can rest assured that your data is safe with the broker since sensitive data that resides in servers is disconnected from the internet reducing the risk of loss and theft.

What’s more, customer data is split with redundancy, is encrypted, and copied to FIPS-140 paper backups and USB drives.

The paper backups and drives are distributed geographically in vaults and safe deposit boxes around the world to ensure safety.

Worth mentioning is that Coinbase does not and cannot sell your data to third parties without your consent.

Insurance

Coinbase has a cover that ensures a portion of digital assets is held across its systems. The insurance policy covers losses from theft including cyber breaches.

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In addition to the digital assets, its fiat balances such as British pounds, US dollars, and euros are covered by FDIC up to a maximum of $250,000 or equivalent.     

It is important to note that the policy does not include losses resulting from unauthorized access to your account due to a breach or loss of your credentials.

It is therefore your responsibility to use strong passwords and has control of your login credentials.

Coinbase is a safe, secure, regulated, and insured crypto broker. The platform is a great starting point for beginners as well as advanced users looking for a reliable cryptocurrency trading and investing platform.