Anyone who’s interested in crypto trading and has done a little research on crypto exchanges must have come across past scenarios including frauds and hacking attacks, with customers losing a lot of money as a result.
These exchanges have suffered not only from outsiders but have oftentimes been defrauded by their own employees as well. It took them some time before they realized that to win more clients and bring back the lost faith in online platforms they would have to improve their security measures.
Today, there are many reliable crypto exchanges that took great pains to provide a seamless user experience. In this regard, Coinbase is one of the leaders in the industry with millions of traders using the platform worldwide.
A lot of traders wonder whether Coinbase is safe enough for them to link their bank account with the platform or store their money in Coinbase’s wallet. That’s why, in our guide will give you some details about the exchange itself and try to answer these questions.
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About Coinbase
Coinbase is an American-based platform launched back in 2012. It’s the leading crypto brokerage around the globe that supports only the best cryptocurrencies on the market. Depending on your place of residence, you can use different deposit methods such as bank transfer, wire transfer, credit or debit card, etc. For any queries, you’ll be happy to know that the Coinbase’s support team is known for its responsiveness.
Pros
- Supports fiat to crypto exchanges.
- Includes top-notch security methods.
- Promises high liquidity.
- It’s very beginner-friendly.
- You can purchase cryptocurrencies with a credit or debit card.
Cons
- Payment methods may vary based on the traders’ location.
- It doesn’t support a variety of cryptocurrencies.
- Complies with KYC and AML policies which means you can’t transact anonymously.
Is Coinbase Secure?
Yes! The company is insured by the Federal Deposit Insurance Corporation (FDIC) and covers losses up to $250,000 for US residents. Their website traffic runs entirely over encrypted SSL (https). To become a Coinbase employee you would have to pass a criminal background check and would be asked to encrypt your hard drive later on.
Most importantly, the majority of data stored on Coinbase isn’t kept on online servers but in “air-gapped” vaults disconnected from the Internet and distributed in different corners of the world. Around 98% of user funds are stored in this type of cold storage and kept separately from company funds.
Is It Safe to Link My Bank Account to It?
Yes! Coinbase protects all private information shared by its clients in much the same way as banks do. For example, the team performs a hash on all passwords stored in their database using bcrypt. The wallets and their private keys are encrypted with AES-256 and then stored. Coinbase isn’t allowed to pull out money from your bank account without getting your request and permission first. Moreover, for any kind of request, the platform needs two-factor authentication. While Coinbase isn’t our recommended exchange to buy Bitcoin, it is still a highly reputable and trusted exchange across the globe.
Can You Buy Anonymously?
No way! There’s one strict rule if you want to register for an account on Coinbase and that’s to provide personal information and verify your identity. This includes attaching a scanned copy of a government-issued ID. Otherwise, your account application will be denied. These requirements are in line with the anti-money laundering policy.
Is Coinbase a Safe Wallet?
The wallet provided by Coinbase is a web-based one and can also be accessed via mobile devices. It supports both Android and iOS. The wallet gives you access to a real-time price chart with circulating volumes of different assets.
So, is the Coinbase wallet safe enough? We’ll say yes, but just as a temporary solution! We advise you not to store your cryptocurrencies online during a longer period. With that being said, you can choose between two options when setting up a Coinbase wallet:
- Standard Wallet
You can create a Standard Wallet if you don’t want to keep your cryptocurrencies online for long but just need a place to store them before selling them or sending them to someone else. This wallet allows immediate payments from Coinbase to your bank account.
- Vault
If you plan on keeping them longer, the Vault is a better option. It stores the funds offline and when you want to make a withdrawal request, Coinbase will send you an email to verify the request but they won’t start the transaction in the next 48 hours.
Final Notes
The fact that Coinbase is backed up by some of the biggest names in the financial industry speaks volumes about the company’s dedication and infallibility. Although we still wouldn’t recommend keeping your funds online long-term, you can definitely use their wallet temporarily. As for linking your bank account with Coinbase or not, we believe you have every right to trust the platform and share the information.
About The Author
James Page
James is the main editor. With a passion for finance and anything blockchain, cryptocurrency is right up his alley. He’s responsible for most of the content on the site, trying his best to keep everything up to date and as informative as possible.
