Today, Coinbase is holding over $100 billion in Bitcoin.
You got source they are hodling his huge amount of bitcoin? 
Topic: Is Coinbase insured? - page 3. (Read 821 times)
An old blog post from 2019 states that they have a policy which covers up to $255 million for their hot wallets.
https://medium.com/the-coinbase-blog/on-insurance-and-cryptocurrency-d6db86ba40bd
This would be enough to cover a hack the size of the WazirX hack from a few months ago. When other major exchanges like Bitfinex and Binance were hacked they have been able to recover eventually. Coinbase is big enough that even if their insurance coverage is not enough they would probably still have enough revenue to make up the losses and customers would eventually be made whole.
https://medium.com/the-coinbase-blog/on-insurance-and-cryptocurrency-d6db86ba40bd
This would be enough to cover a hack the size of the WazirX hack from a few months ago. When other major exchanges like Bitfinex and Binance were hacked they have been able to recover eventually. Coinbase is big enough that even if their insurance coverage is not enough they would probably still have enough revenue to make up the losses and customers would eventually be made whole.
Coinbase has something like $120B in Bitcoin keys. That's like having no coverage at all, basically
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An old blog post from 2019 states that they have a policy which covers up to $255 million for their hot wallets.
https://medium.com/the-coinbase-blog/on-insurance-and-cryptocurrency-d6db86ba40bd
This would be enough to cover a hack the size of the WazirX hack from a few months ago. When other major exchanges like Bitfinex and Binance were hacked they have been able to recover eventually. Coinbase is big enough that even if their insurance coverage is not enough they would probably still have enough revenue to make up the losses and customers would eventually be made whole.
https://medium.com/the-coinbase-blog/on-insurance-and-cryptocurrency-d6db86ba40bd
This would be enough to cover a hack the size of the WazirX hack from a few months ago. When other major exchanges like Bitfinex and Binance were hacked they have been able to recover eventually. Coinbase is big enough that even if their insurance coverage is not enough they would probably still have enough revenue to make up the losses and customers would eventually be made whole.
Coinbase offers this vague promise on their website that they are "partially insured", but does anybody know what that actually means? If they are hacked and the addresses get destroyed or stolen (we'd never know which), then... where would that leave Coinbase depositors?
It's a business, a risky one with one of targets of hackers, and so yeah they probably has reserve fund for this incident and insurance in case such thing happens. But as for other businesses like banks, they probably have maximum amount to be recovered say only $250,000 just like FDIC insured banks, more than that will be considered as thank you and goodbye. That's why, "not your keys, not your coins" slogan are always used and reminder. 
yes they are insured but up to $250k only per account.
So make sure your deposit doesn't exceed their insurance limit. It’s always wise not to keep your Bitcoin on an exchange since you don’t own the keys. Exchanges are mostly for trading purposes only, so as long as your capital isn’t too large, your funds should be safe as long as they don't exceed the coverage ceiling.
Quote from: https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured
Our custodial accounts have been established in a manner to make pass-through FDIC insurance available up to the per-depositor coverage limit then in place (currently $250,000 per individual).
So make sure your deposit doesn't exceed their insurance limit. It’s always wise not to keep your Bitcoin on an exchange since you don’t own the keys. Exchanges are mostly for trading purposes only, so as long as your capital isn’t too large, your funds should be safe as long as they don't exceed the coverage ceiling.
This insurance only covers cash balances deposited through bank transfers, debit cards, PayPal, etc. For crypto, according to their TOS, it's covered by crime insurance, though they haven't specified the exact coverage amount. If a substantial amount is lost, like in the billions, only a portion might be covered. But since it's a regulated exchange, they could seek government support to track any hacked funds. I’m sure they don't keep all their funds in a single cold wallet either—they likely have risk management strategies and solid internal controls to minimize risks. Of course, no exchange is hack-proof.
As for Binance, the amount that was hacked before was manageable, given their massive daily trading volume. Currently, they're number 1 on the list (https://coinmarketcap.com/rankings/exchanges/) with $8 billion in volume, so they might earn a minimum of $5 million per day just from trading fees. The SAFU funds (a percent of their revenue) are internal funds specifically set aside for these situations; I’m not sure if Coinbase has a similar setup.
I don't know if I'm right or not but I heard somewhere that Coinbase's most Bitcoin's lie in their offline cold wallets that no one can hack unless they get to it physically get access to it.
Which is completely possible. There have been entire banks robbed in the past. It'd be completely feasible for the same thing to occur in Coinbase. (And I highly doubt all their assets sit on airgapped wallets.)Unless they have a SAFU fund like Binance and publish their audits on their website for everyone to see (unlike Binance [until very recently]), you should always assume that they are not insured.
How's Binance different? It does have as well most of its assets in crypto. If they're compromised, they cannot pay their clients back, just as with Coinbase. I don't know if I'm right or not but I heard somewhere that Coinbase's most Bitcoin's lie in their offline cold wallets that no one can hack unless they get to it physically get access to it. And, that could be true for this statement as well. If they have stored most of their Bitcoin assets to offline wallets then that's a good security measure and somewhat hack proof.
Let's say if 10% or $10 billion of their Bitcoin assets are available at their hot wallet and it somehow gets hacked then that could cause huge problems for them and also for the market in general. That could have very hard impact on the value of Bitcoin in general as most of the weak hands will keep dumping their Bitcoin at market.
I could see that. Let me be clear here that I would almost guarantee that Coinbase tries very very very very hard to keep their keys secure, and surely they have a lot of detailed governance processes to make sure the system is very safe.
But it will never be as safe as holding USD in an American bank because of FDIC insurance...
Coinbase offers this vague promise on their website that they are "partially insured", but does anybody know what that actually means? If they are hacked and the addresses get destroyed or stolen (we'd never know which), then... where would that leave Coinbase depositors?
I don't know if I'm right or not but I heard somewhere that Coinbase's most Bitcoin's lie in their offline cold wallets that no one can hack unless they get to it physically get access to it. And, that could be true for this statement as well. If they have stored most of their Bitcoin assets to offline wallets then that's a good security measure and somewhat hack proof.Let's say if 10% or $10 billion of their Bitcoin assets are available at their hot wallet and it somehow gets hacked then that could cause huge problems for them and also for the market in general. That could have very hard impact on the value of Bitcoin in general as most of the weak hands will keep dumping their Bitcoin at market.
Unless they have a SAFU fund like Binance and publish their audits on their website for everyone to see (unlike Binance [until very recently]), you should always assume that they are not insured. In fact, they carry this very warning if you visit from the UK (British government requires all platforms to have this kind of notice).
I was talking about if user data is destroyed which is essential in cross-checking who owns which but perhaps it's not what you meant here: 🤔
I think got what you meant, I was just pointing out that securing crypto is two things at once: making sure it isn't deleted and making sure it isn't discovered. Either one of these things can cause a major disaster, so you have to do both at the same time. It's far easier to do one or the other, but doing both at the same time compounds the complexity.
If they are hacked and the addresses get destroyed or stolen (we'd never know which),
yes they are insured but up to $250k only per account.
It still doesn't make sense to me how they plan to cover $250,000 for each account with compromised crypto, given that most of Coinbase's assets are in crypto.It is worth noting that only fiat deposits are insured because coinbase stores them in FDIC-insured banks-- probably doesn't apply to non-US coinbase customers as well tho cmiiw. Cryptocurrencies remain uninsured.
You can store USD in your Coinbase account just like at any bank. USD holdings would be FDIC insured.
I'm actually not sure about non-US residents storing USD (or cash equivalents) in a US-based FDIC-insured bank.
If only there was a rep from Coinbase here to clear all of this up for us
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Um, backups of the data won't prevent it from being stolen. And the more places you spread the data around to, the more places need to be secured.
I'm not saying it's impossible to secure it, but it's not as simple as making backups.
I'm not saying it's impossible to secure it, but it's not as simple as making backups.
I was talking about if user data is destroyed which is essential in cross-checking who owns which but perhaps it's not what you meant here: 🤔
If they are hacked and the addresses get destroyed or stolen (we'd never know which),
yes they are insured but up to $250k only per account.
It still doesn't make sense to me how they plan to cover $250,000 for each account with compromised crypto, given that most of Coinbase's assets are in crypto.It is worth noting that only fiat deposits are insured because coinbase stores them in FDIC-insured banks-- probably doesn't apply to non-US coinbase customers as well tho cmiiw. Cryptocurrencies remain uninsured.
It could also generate a lot of hatred and callouts for harsher and stricter Regulations.
Which would be bad for centralized exchanges, and good for decentralized exchanges. There's really not much more you can regulate than what's already been regulated. It's just the nature of Bitcoin that can be trivially moved across time and space anonymously, if one compromises your setup.yes they are insured but up to $250k only per account.
It still doesn't make sense to me how they plan to cover $250,000 for each account with compromised crypto, given that most of Coinbase's assets are in crypto. Coinbase carries only crime insurance. If they experience data breaches or attack and you lose money because of that, they'll give you a refund but Coinbase doesn't claim how much money they'll refund.
They also don't say how much money they have insured, so, if you lose $1000 because of their mistake, you might receive $1000 or $200 or nothing, no one knows exactly because even if they partner with other insurance companies and are insured, there aren't guarantees that insurance company will cover the losses. There have been many cases when insurance company turned into a scam in the end.
They also don't say how much money they have insured, so, if you lose $1000 because of their mistake, you might receive $1000 or $200 or nothing, no one knows exactly because even if they partner with other insurance companies and are insured, there aren't guarantees that insurance company will cover the losses. There have been many cases when insurance company turned into a scam in the end.
Okay but... what good is that?
They are saying they will "partially" make you whole, but they don't say what "partially" means? So somewhere between 99% and 0.01%? That is the same as no promise at all.
yes they are insured but up to $250k only per account.
So make sure your deposit doesn't exceed their insurance limit. It’s always wise not to keep your Bitcoin on an exchange since you don’t own the keys. Exchanges are mostly for trading purposes only, so as long as your capital isn’t too large, your funds should be safe as long as they don't exceed the coverage ceiling.
Quote from: https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured
Our custodial accounts have been established in a manner to make pass-through FDIC insurance available up to the per-depositor coverage limit then in place (currently $250,000 per individual).
So make sure your deposit doesn't exceed their insurance limit. It’s always wise not to keep your Bitcoin on an exchange since you don’t own the keys. Exchanges are mostly for trading purposes only, so as long as your capital isn’t too large, your funds should be safe as long as they don't exceed the coverage ceiling.
(Before I start this topic, I just want to say that I don't want to pick on Coinbase here specifically, but they are the biggest with over 10% of all Bitcoin being held for customers, so they are a good example--but assume here that this question could apply to any digital asset custodian).
Today, Coinbase is holding over $100 billion in Bitcoin.
While I am sure they go to great lengths to secure this money (!), we'd have to concede there is a non-zero chance they could lose some or all of this Bitcoin to theft or simply losing it.
And then what?
Coinbase offers this vague promise on their website that they are "partially insured", but does anybody know what that actually means? If they are hacked and the addresses get destroyed or stolen (we'd never know which), then... where would that leave Coinbase depositors?
Coinbase carries only crime insurance. If they experience data breaches or attack and you lose money because of that, they'll give you a refund but Coinbase doesn't claim how much money they'll refund. They also don't say how much money they have insured, so, if you lose $1000 because of their mistake, you might receive $1000 or $200 or nothing, no one knows exactly because even if they partner with other insurance companies and are insured, there aren't guarantees that insurance company will cover the losses. There have been many cases when insurance company turned into a scam in the end. Today, Coinbase is holding over $100 billion in Bitcoin.
While I am sure they go to great lengths to secure this money (!), we'd have to concede there is a non-zero chance they could lose some or all of this Bitcoin to theft or simply losing it.
And then what?
Coinbase offers this vague promise on their website that they are "partially insured", but does anybody know what that actually means? If they are hacked and the addresses get destroyed or stolen (we'd never know which), then... where would that leave Coinbase depositors?
Of course it is not secure, what makes Coinbase different from Mt. Gox or any of the other hacked exchanges or even FTX? Nothing of course, hacking can happen at any time and theft from the inside is not ruled out either.
Nothing guarantees customer funds on any centralized exchange, everyone knows that centralized exchanges are not secure but unfortunately some people are too lazy to keep their crypto assets themselves so they prefer to deposit them in centralized exchanges to protect them instead or simply buy shares in centralized ETF companies.
Nothing guarantees customer funds on any centralized exchange, everyone knows that centralized exchanges are not secure but unfortunately some people are too lazy to keep their crypto assets themselves so they prefer to deposit them in centralized exchanges to protect them instead or simply buy shares in centralized ETF companies.
It would likely create a fiasco similar to the Mt. Gox incident. Since their assets are primarily in Bitcoin and other cryptocurrencies, I don't understand what guarantees the security of that money.
The catastrophe this would generate is unimaginable if you think about it. That much Money lost all of a sudden, so many people losing their Money in an instant, it is as if an International Bank collapsed.It could also generate a lot of hatred and callouts for harsher and stricter Regulations. I, for one would not want my Money to be sitting in such a large Wallet. The risks are simply insane.
Today, Coinbase is holding over $100 billion in Bitcoin.
Coinbase has 9,480 BTC for their own company that is 1.31% of current marketcap or 0.045% of Bitcoin total supply (21M bitcoins).https://bitcointreasuries.net/
https://bitcointreasuries.net/entities/coinbase
But they are holding more bitcoins as a custodian of many Bitcoin Spot ETFs.
https://blockworks.co/bitcoin-etf
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And then what?
Coinbase offers this vague promise on their website that they are "partially insured", but does anybody know what that actually means? If they are hacked and the addresses get destroyed or stolen (we'd never know which), then... where would that leave Coinbase depositors?
The information officially on Coinbase website is like other companies. They won't guarantee that in incidents when their company, this case is Coinbase, got big problems, they will pay customers 100%.Coinbase offers this vague promise on their website that they are "partially insured", but does anybody know what that actually means? If they are hacked and the addresses get destroyed or stolen (we'd never know which), then... where would that leave Coinbase depositors?
With this information, if you dig deeper, Coinbase probably don't have their company treasury pegs as 1:1 in fiat currency:cryptocurrency. They are not a stable coin company and this 1:1 peg in treasury is not applicable to their company.
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In case of a covered security event, we will endeavor to make you whole. However, total losses may exceed insurance recoveries so your funds may still be lost.
Yes, it's not safe to store your cryptocurrency on Coinbase or any custodian platform.
Reminder: do not keep your money in online accounts
Honestly, I would expect a big company like coinbase to have several backups of user data otherwise it's gonna be a tricky situation if shit happens.
Um, backups of the data won't prevent it from being stolen. And the more places you spread the data around to, the more places need to be secured.
I'm not saying it's impossible to secure it, but it's not as simple as making backups.
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And the bottomline is still cryptocurrencies are not insured. I guess they have taken steps in case shit happens but you could tell they're not confident about it.
Based on that wording, I think they are clearly covering their butts here. If they were really insured such that it would protect their depositors, they would say so.
So.... while we're at it here, does anybody know: is Binance insured? Is there such a thing as an insured store of crypto anywhere?
Honestly, I would expect a big company like coinbase to have several backups of user data otherwise it's gonna be a tricky situation if shit happens.
And the bottomline is still cryptocurrencies are not insured. I guess they have taken steps in case shit happens but you could tell they're not confident about it.
This bit screams like the typical "we will do our best" to me which promises nothing in particular but provides a positive outlook nonetheless.
And the bottomline is still cryptocurrencies are not insured. I guess they have taken steps in case shit happens but you could tell they're not confident about it.
This bit screams like the typical "we will do our best" to me which promises nothing in particular but provides a positive outlook nonetheless.
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In case of a covered security event, we will endeavor to make you whole. However, total losses may exceed insurance recoveries so your funds may still be lost.
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