If you have been exploring the crypto-world, you have inevitably come across Coinbase. One of the most popular crypto exchanges in the world, Coinbase offers plenty of coins for purchase and is also considered one of the best places to buy Bitcoins from.
A lot of crypto users buy coins from Coinbase and store them in its wallet instead of moving them to another dedicated wallet. Before you do that, it doesn’t hurt to know about Coinbase’s legitimacy and safety features.
Coinbase is one of the most well-known crypto exchanges out there, but if you are just starting to invest, you may have doubts about its safety and legitimacy. Check this article to know more.
Safety Features of Coinbase
The crypto-exchange was launched in October 2012, and since then has maintained a clean record with fund management. Coinbase is one of the few crypto exchanges that have a license in New York and it comes under the BitLicense program.
If you want to sign up on Coinbase, you need to complete the Know Your Customer formalities, where you have to provide basic personal details. This makes Coinbase compliant with the majority of rules and regulations.
Coinbase has the license and legal rights to operate in 31 countries, at the time of writing, and in the US alone, the exchange boasts more than 40 licenses. Coinbase is also insured which means your money is safe, and neither the platform nor any third-party can simply run away with your money!
One major point that makes Coinbase stand out in its safety features is that it does not allow anonymous usage. Due to the KYC, the user has to provide government-issued identity proof at the time of sign-up, and in some cases, there needs to be address verification done as well. Unless the user does not complete these formalities, they will not have access to most Coinbase features, including BUY and SELL.
Cryptocurrencies and Withdrawal Limits
Coinbase is often seen as the entry point for cryptocurrency trading for new users at least. That’s why the exchange only offers 4 cryptocurrencies in exchange for fiat money, they are – Bitcoin, Bitcoin Cash, Ether, and Litecoin.
The reason for this limited number of purchase options is to make the entry to cryptocurrency trading and investing simpler for newbies and also to put focus on commodities and currencies rather than securities and equities. Coinbase rarely adds new coins on the platform. This adds to the trustworthiness of the platform.
The platform practices security and complies with regulations through its strict account limits. Every user has different limits and that is determined by the used payment method, the age of the account, and the purchase history. This account limit is calculated automatically by the platform. The more information the user provides, the higher will be their limit.
Is Coinbase Covered By Insurance?
The good news is that it is! The platform was first covered by an insurance company, Aon which is also the largest insurance broker in the world. The coverage was provided in November 2013.
Users can also verify on the support page of Coinbase, that an amount of up to $250,000 is insured, and in an event of failure, or hacking, the respective amounts will be returned to the customers. But note that you may receive the compensation in fiat currency and not Bitcoins or any other crypto coins.
How does Coinbase Store your Money?
It is obvious that no online platform is 100% safe, but Coinbase is quite close to that. Because the wallet stores 99% of its assets in cold storage that is almost impossible to access and hack.
Only 1% of its assets are in circulation within the hot wallet system and even this is insured, as described above. You can read more about this on Coinbase’s official website.
Is Coinbase Safe and Legit?
Coinbase is 100% legit, because it has been around for a long period (since 2012 to be precise), and there have been no major complaints against them so far. Coinbase has a growing user base every year that includes seasoned and high-profile investors as well.
The safety features of Coinbase are also strong and make the money in the platform secure. But still, note that no platform is 100% foolproof in terms of safety and security.