Setting the document straight: Your funds are secure at Coinbase — and all the time shall be

Setting the document straight: Your funds are secure at Coinbase — and all the time will be

By Paul Grewal, Chief Legal Officer

A few weeks in the past, a newly required SEC disclosure we made in our 10Q created some noise about how Coinbase holds crypto belongings and what might occur within the extremely unlikely occasion of the corporate’s insolvency. This led to some real concern amongst individuals who maintain crypto belongings on Coinbase.

Even although buyer belongings have all the time been protected, we all know this was scary — particularly in a down market. We need to share how we’re conserving your belongings secure at the moment and within the future:

• Your funds are your funds, and your crypto is your crypto: Coinbase maintains inner methods, like a financial institution or a dealer. Our totally audited ledger identifies your account, your fiat and crypto holdings, and tracks your account exercise in actual time. There’s by no means a state of affairs the place buyer funds may very well be confused with company belongings.
• We won’t ever repurpose your funds: We don’t lend or take any motion along with your belongings, except you particularly instruct us to. Many banks and monetary establishments use buyer funds for business functions together with lending and buying and selling, that means that they usually maintain solely a fraction of their buyer belongings at any given time. Coinbase all the time holds buyer belongings 1:1. This signifies that funds can be found to our prospects 24 hours a day, 7 days every week, twelve months of the 12 months.
• We have clarified our Retail User Agreement: We have all the time protected our buyer funds each legally and bodily. We additionally just lately up to date our Retail User Agreement to expressly spotlight the applicability of UCC Article 8 — the identical authorized safety that our institutional shoppers additionally depend on to guard their belongings within the occasion of a custodian chapter. This will not be a change in how we do enterprise. We consider that digital belongings in our custody have all the time been Article 8 monetary belongings, however have clarified this in order that there won’t be any doubt.

We hope that the clarifications above present you — our buyer — with confidence and readability. We apologize for the confusion across the disclosure. Even although it was in response to steering relevant to any publicly traded crypto custodian from an necessary regulator, it induced pointless uncertainty and anxiousness.

The crypto area is a dynamic one, and we are going to all the time search to make use of one of the best buildings to make sure that our shoppers’ belongings are managed within the most secure approach doable.

One closing big-picture be aware

As Brian shared with our groups a pair weeks in the past, volatility in crypto — or any market — is inevitable. We can’t management it, however we do plan for it. That’s why, via the ups and downs of crypto over the past 10 years, Coinbase has centered on constructing — scaling via the highs and innovating via the lows.

Nothing about Coinbase has modified. If something, we’re in an excellent stronger place than we have been a number of months, or a 12 months in the past — and we’ll hold working to be the best, most trusted approach for individuals to get entangled in crypto. #Longlivecrypto

Setting the record straight: Your funds are safe at Coinbase — and always will be was initially revealed in The Coinbase Blog on Medium, the place persons are persevering with the dialog by highlighting and responding to this story.