Security is one of the most important parts of any crypto exchange. Coinbase has a solid reputation and lots of security features. We rounded up all of Coinbase's security features and past incidents. Let's break it down:
Company Security Features
- 98% of crypto assets are held in offline cold storage
- $255 million insurance policy on the 2% of crypto held in online hot wallets
- Sensitive data is stored on paper backups and USB drives in vaults and multiple locations
- Coinbase claims all personal information is encrypted
- Employees must pass a criminal background check
- Bug bounty program - they pay white-hat hackers to find security bugs and vulnerabilities
- See their security page for more
User Security Features
- 2 Factor Authentication for login and withdrawals (SMS, App or hardware device like Yubikey)
- Set up Pin or Touch ID for app login, sending transfers and more
- Security notifications via email, SMS and push (eg. Your password has been reset)
- View account activity (logins, locations, IP addresses, etc)
- Account activity notifications (eg. buys, sells, transfers, etc)
- Coinbase Vault - wallet with time-delayed withdrawals, offline storage, and multiple approvers
- Coinbase offers an emergency phone number to lock your account
Other Security Notes
- Good reputation since being founded in 2012
- Compliant in over 100+ countries including Australia
Coinbase Hack May, 2021
Coinbase was founded in 2012 and faced their first breach in 2021. Hackers stole crypto from 6,000 Coinbase customers by finding a vulnerability in the SMS account recovery process. Fortunately, no users funds were lost because Coinbase reimbursed everyone affected.
Can You Trust Coinbase?
Yes. Coinbase is still one of the most trustworthy platforms in the crypto industry. They have a great reputation, they're a publicly traded company in the USA, they have insurance, and offer many security features like 2FA and more.
However, although Coinbase is considered safe, you should not hold all of your assets on any crypto exchange. Centralized platforms always have a small risk of hacks, government confiscation and more. The safest way to store your crypto is offline using a hardware wallet.