Most cryptocurrency exchanges around the world are legit. However, the apparent lack of crypto market regulatory statutes around the world is a glaring problem and consequently hinders potential investors.
Cryptocurrency exchange platforms in the US, Europe, Australia, and Asian markets have made tremendous progress. Coinbase – a top crypto trading company – has certainly set the standard concerning secure e-wallets and reputable crypto exchanges.
Popular cryptocurrency traders and brokerages are reputed for their ability to keep users' data and digital currencies secure. On that front, Coinbase serves the dual purpose of a secure crypto wallet as well as crypto exchanges.
Unlike other crypto brokerages with questionable reputations, Coinbase is recognized worldwide by users as an entry platform to crypto trading. However, the question is, how safe and secure are users' data and digital currency on Coinbase? Is Coinbase wallet safe? Read on to learn about the comprehensive security review of the platform.
What Is Coinbase?
Anyone with the mildest information about the crypto industry might have already heard the term Coinbase float around. Essentially, Coinbase is a leading digital cryptocurrency brokerage service where users can both exchange or store their cryptocurrencies. The company was founded in 2012, runs out of San Francisco, CA, and has traded north of $50 billion in digital currency.
The brokerage deals only with reputable cryptocurrencies, and users can exchange US Dollars for a choice of five, including Bitcoin (BTC), Ethereum Classic (ETC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BTH).
However, users on Coinbase Pro – which is also a brokerage service owned by Coinbase – can access more digital currencies because the platform supports more features and cryptocurrencies compared to Coinbase’s regular platform.
The popularity of Coinbase is down to simplicity. It is no wonder the platform is an attractive proposition to newbies and entry-level users. On the standard platform, the Coinbase user interface is quite simple, and users can buy or trade cryptocurrencies quite easily. The different levels of support offered by Coinbase for cryptocurrencies mean users can buy, sell, withdraw, or deposit all supported digital currencies.
That said, the Achilles heel of all crypto wallets is safety. As a core feature, it is not always safe to keep your digital coins in a brokerage or exchange service because of the ever-present danger of hacking that is involved.
The safety standards of most exchanges often put doubt in the minds of potential investors. Like other top crypto wallets, Coinbase has a comprehensive security protocol that enables users to securely trade Bitcoin and other digital currencies. Nevertheless, is Coinbase wallet safe enough to erase any doubts about compromising user data?
The Security Assurance of a Coinbase Account
Coinbase renders its services to customers in countries and regions such as the United States, Canada, The UK, and Europe. Regarding safety, Coinbase is as trustworthy and safe as any other online brokerage service in the US.
First and foremost, the company has established impermeable security measures to safeguard user wallets. Secondly, Coinbase is a signatory to all state and federal statutory regulations relating to monetary and financial data and adheres to the latter. When creating a Coinbase account, the company has put in place the following security measures:
Users must meet a 2-step verification during setup.
The company allows Biometric fingerprint access and logins.
Online security insulation that protects users 100% while entering online payment gateways.
First-time crypto buyers are issued two keys: a private secret key to access your money vault, and a public key that is reminiscent of a mailing address.
Upon creation of a personal password, users get full control over their crypto wallets anytime and anywhere, even without internet access.
The company is compliant with the Bank Security Act and has backing from reputable institutions such as the Bank of Tokyo.
Among others, these are some of the steps the company has established to ensure absolute safety for user accounts on Coinbase. The company has evolved since 2012 and survived the dynamic financial regulatory landscape to become one of the safest crypto brokerage services in the world. Besides, its core security and sustainability pillar is to store 98% of funds offline to safeguard user accounts on Coinbase.
How Coinbase Safeguards Funds on User Accounts
Beyond protecting user accounts from online data and crypto theft, Coinbase ensures none of the funds held on Coinbase is used. The company offers safety features such as insurance policies and utilizes the services of custodial financial institutions to keep your money away from operational costs and creditors. In keeping your funds and data safe in a Coinbase wallet, here is what the company does:
Coinbase steers your crypto funds clear of operational costs or company business.
The company keeps 99% of its assets in hack-proof cold storage and makes 1% available to drive online trading. Moreover, those assets in cold storage are insured in case something happens.
Less than 1% of user crypto data is kept online. 99% of that data is backed up and held offline in drivers and servers, and stashed away securely ins safety deposit boxes.
The company offers great insurance features, but in the event of an unforeseen security breach or catastrophic failure on Coinbase’s system, users can claim severance payments of up to $250,000 via the FDIC.
Coinbase uses custodial banks to hold digital currencies so that neither its business nor creditors can access them.
The company holds 99% of its assets in cold storage to protect your funds from market recessions and financial crashes.
How To Keep Your Coinbase Wallet Safe
As always, the first armor of protection to your Coinbase Personal Account is your password. The idea is to create a strong and hard-to-decipher password. Among others, here are useful tips to keep your Coinbase crypto account safe:
Utilize the 2-factor authentication criteria provided by the company. If you have an Android device, Google Authenticator is your most secure option.
Subscribe to Coinbase’s photo ID authentication to prevent fraudsters and further safeguard your account.
Opt into the Biometric fingerprint login model to add another layer of protection when accessing your crypto wallet.
Avoid random logins into your account via an insecure or public Wi-Fi Network.
Ensure you access your Coinbase account through the company's official website rather than third-party contacts.
Make it a habit to alter your Coinbase account password after every four months, and always monitor the IP address activity log.
Sometimes you may be required to prove ownership of your crypto account, so be sure to keep a copy of your electronic password.
Inform the customer service desk if suspicious devices log into your crypto account.
The Bottom Line
One reason that sets Coinbase apart from the competition is not only its safe cryptocurrency technologies, but its widespread coverage, the clutter-free user interface on the website, and support for multiple cryptocurrencies and payment gateways.
The single Achilles heel in the operations of crypto exchange platforms is the safety of customer data and digital coins from hackers, scams, and security breaches. That said, Coinbase remains unhindered by breaches and has never been the subject of system hacks or scams. This has elevated the platform' trustworthiness, as it remains one of the safest crypto brokerages in the world.
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