Is It Safe to Store Cryptocurrency on Coinbase? The Motley Fool

billions of dollars

It prevents capturing and changing data you’re sending to a web server. Coinbase is a US-based cryptocurrency trading platform that operates in over 100 countries. By 2014, it had amassed over 1 million users and launched Coinbase Global. Coinbase helped accelerate the adoption of crypto payments worldwide by partnering with major companies like Dell, Expedia, and Time Inc.

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Avoiding a custodial wallet is the best way to keep your cryptocurrencies safe. In May 2022, cryptocurrency exchange giant Coinbase made an SEC disclosure that created turmoil in the crypto space. It warned that customer assets could be subject to proceedings if the company went bankrupt, raising questions about the risks of Coinbase’s bankruptcy risk.

Is Coinbase a Safe Place to Buy, Sell, and Store Your Crypto?

With over 13.3M active users, there are few exchanges that are as trusted and reliable as Coinbase. This will take you through the process to create your second Coinbase account. Once it has been created, click on “Transfer Funds” in order to transfer funds from your primary Coinbase account to your secondary account. Your primary account will not be able to transact with the secondary account. However, to create a second account, you will need to verify your email address and phone number. After verifying this information, click the “Add account” button on the bottom right-hand side of the page.

There have also been cases where have violated the Coinbase user agreement for some reason. Coinbase has the right to freeze accounts used in connection with fraudulent activity, even if it’s not directly related to transactions done through Coinbase. The only way someone could access your funds would be if they had access to your Coinbase account or private key. There are also “fake” wallets that store your private keys on a server, which could lead to you losing access to your wallet and coins if the wallet developers have malicious intentions.


However, Coinbase suffered a hack in Autumn of 2021, wherein 6,000 users lost funds from their wallets. It was thought that this hack was made possible via a phishing scam, wherein customers gave their login details to the malicious party under the assumption that it was Coinbase requesting them. The company also received a five million dollar from Fred Wilson, an American venture capitalist, and a generous 25 million dollars from several other investment firms, all in the space of one year.

Step 6: Make a Purchase

From the Coinbase app or site, you can view your crypto balance and set a watchlist of tokens you want to buy or sell. Coinbase allows you to hold crypto in a secure cryptocurrency wallet, send crypto directly, spend it wherever merchants accept crypto payments, or withdraw it. Coinbase also has a great whitelisting feature that can be used to ensure that your funds are only sent to accounts that you, yourself, have whitelisted. Any wallet addresses that you have in your address book will be considered as whitelisted, with all other addresses being prevented from receiving any crypto from your account.

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Firstly, if you want to use your debit or credit card, you will need to make an instant cryptocurrency purchase. In other words, you can’t use your card to simply leave the funds in your account for a later date. It is much more difficult to steal funds that are locked offline than those which are held in a hot wallet. A brief look at the history of Bitcoin and cryptocurrencies reveals why it is dangerous to leave your crypto funds in an exchange. Since 2011, over $1.65 billion worth of crypto assets have been stolen, and the numbers are getting bigger every year.

How to keep things in your favor financially as a tenant

Our site has been designed with a focus on ease of use at all times, giving beginners the ability to buy as many cryptocurrencies as possible within minutes. The main difference between Bitcoin and Ethereum is that Bitcoin is a digital currency while Ethereum is a platform that uses smart contracts. Coinbase is a digital wallet that allows you to store and trade cryptocurrencies.


Instead, most users will find that it can be quite simple to get lost in all of the jargon and technicalities. The opinions expressed on this Site do not constitute investment advice and independent financial advice should be sought where appropriate. All our articles are fact-checked by a relevant professional with expertise in that area of finance and we regularly update guides as necessary. Ultimately, while there are cheaper options in the market, you also need to remember that Coinbase has an excellent track-record when it comes to keeping user funds safe. Not only does the platform offer a number of stringent security safeguards, but it also has an excellent relationship with key US regulators such as the SEC and FinCEN.

To determine whether Coinbase wallet is good or bad, it is necessary to look at several different factors. Firstly, it is important to consider the security measures offered by the wallet. Coinbase has a strong reputation for security and is one of the most trusted cryptocurrency exchanges in the world.

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For example, if you have 1 Bitcoin in your wallet, and it’s worth $10,000 it will generate you 10% of the profits earned. Gemini is one of the most acclaimed cryptocurrency exchanges in the world. The company’s website was hacked with an announcement saying that they were going to delist all assets and giving everyone $20. Gemini denied this and said that it was a scam site, but there are still questions about what really happened. A Coinbase Vault can be set up for free by any Coinbase user, just as you can set up a crypto wallet with Coinbase for free.

Coinbase Review

A variety of large is it safe to keep my money on coinbase? exchanges have already confirmed they report to the IRS. A John Doe summons compels a given exchange to share user data with the IRS so it can be used to identify and audit taxpayers, as well as prosecute those evading taxes. You can withdraw any crypto you have directly to a linked Coinbase account. From there, you can convert the crypto to cash and withdraw the funds to a linked bank account.


Coinbase fees, however, can be confusing and higher than some competitors. In most cases, you won’t do wrong by using this particular cryptocurrency exchange platform. However, it might not suit everyone – if you’re an expert trader who values their privacy and anonymity, then Coinbase might not really be for you. However, if you’re just starting out, then sure – it’s surely one of the better options. Gemini, a cryptocurrency exchange based in Hong Kong, was hacked last week, resulting in over 4 billion USD’ worth of coins being stolen.

  • In summary, it is clear to see why Coinbase has attracted a significant customer base that now exceeds over 30 million customers.
  • Taking into account that the phenomenon is just over 10 years old, this is a considerable amount of money.
  • The company was based in the Bahamas and left billions of dollars of its customers’ assets in regulatory limbo when it collapsed.

You should register more than one mobile number on the settings page so you can receive this code in case your phone is lost or stolen. Virtual Currency Exchange Association , which intends to establish transparent industry standards and promote best business practices in the crypto space, emphasizing consumer protection through self-regulation. Dealing with volatility is one of the realities of trading in cryptocurrency. Opening an account with Coinbase requires that you link a payment method to it to enable buying, selling, adding funds, and withdrawing funds whenever needed.

In some cases, we receive a commission from our partners; however, our opinions are our own. Coinbase is just as secure as most other platforms, but users should still look out for phishing scams and hackers. You see, Coinbase being a hosted wallet means that all of your cryptos are stored together with some other user coins and information, on a remote server that’s constantly connected to the internet. The severity of this “issue” depends on your own, personal goals when it comes to cryptocurrencies.

In addition, you will learn about the company’s hack history, credibility, commercial sponsorships, uplisting on the NASDAQ, and the effect of institutional crypto purchases facilitated by this platform. BitDegree Crypto Reviews aim to research, uncover & simplify everything about the latest crypto services. Easily discover all details about cryptocurrencies, best crypto exchanges & wallets in one place.