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Is Coinbase Safe and Legitimate? Or is Coinbase a Scam?

2023: Is Coinbase a scam? Is Coinbase a legitimate and safe crypto trading firm? BBB rating. Is my Coinbase account SIPC/FINRA/FDIC insured?

Is Coinbase Legitimate?

As cryptocurrency continues to grow, even major companies are including several crypto assets on their balance sheets. However, with this growth, many retail investors have begun investigating the safest ways to enter crypto investing. In this post, we'll look at the safety of the Coinbase exchange to see if it's safe for investors to utilize when buying and selling cryptocurrency assets.

What is Coinbase?

In 2012, Brian Armstrong and Fred Ehrsam created the Coinbase exchange to simplify buying and selling of cryptocurrency for new users. Since then, Coinbase has become one of the largest exchanges in the world.

Coinbase is available in 32 countries around the globe and provides users with an easy way to buy and sell bitcoin, ethereum litecoin, and bitcoin cash. The company also allows investors to create a wallet on their site that they can use to hold multiple different cryptocurrencies.

Coinbase aims to make the purchase/sale of cryptocurrency as easy as possible for new users, which has led to its massive growth over the past few years. Since its inception, Coinbase has hosted more than $150 billion in digital currency transactions and growing.

Is Coinbase Safe?

One of the main reasons many retail investors use Coinbase is because it's easy to use and highly secure. Since its beginning, the exchange has prioritized making sure any funds deposited with them are kept entirely safe.

Coinbase is one of the most high-profile cryptocurrency exchanges globally, and as such, security is taken very seriously by both employees and those using the platform. The company provides multiple layers of security to make sure any transactions made on the exchange are as safe as possible. Coinbase is insured against employee theft and hacking and has a full team of experts working behind the scenes to protect investors.

Coinbase was one of the first exchanges to offer Two-factor Authentication (2FA) to make sure no unauthorized could log into an account and transact on it. This measure is an excellent way for new investors to ensure they don't lose any of their investments if something happens without them knowing.

Coinbase also uses "cold storage" which means cryptocurrency stored with the company isn't kept online or in a hot wallet. Instead, assets are stored offline in a vault.

Is Coinbase a scam

What About Coinbase Scams?

As with any bank account or exchange, people regularly attempt to gain access to user accounts. One of the most common ways scammers do this is by sending fake Coinbase emails to trick people into sharing their Coinbase login credentials.

These types of scams are simply phishing attempts and revolve around tricking people into entering their login information. Commonly, scammers will pretend they are Coinbase support to make it look like the email is legit.

The primary way to avoid this scam is to make sure you take extra safety precautions when using web-based software. One of the best ways to protect yourself with Coinbase is by using 2FA, which prevents any unauthorized transactions from being made.

Multiple Coinbase scams revolve around convincing people to invest in "hot" coins that either don't exist or aren't legitimate investments. These types of scams can cost investors large sums of money and should always be avoided.

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Is Coinbase Safe For New Investors?

Coinbase is a relatively safe exchange to use when buying cryptocurrency, with many layers of security in the form of 2FA and cold storage. It can help investors avoid scams and keep their money secure from potential phishing attempts when used properly.

Is Coinbase Legit?

Will Coinbase Refund if Scammed?

While you'll be eligible for a Coinbase refund if the firm's error causes unauthorized transactions from your account, you won't receive a return if you share your account information with a third party.

Under Section 43 of the Federal Deposit Insurance Act, Coinbase is required to reimburse you for any lost funds resulting from unauthorized transactions. However, this coverage does not apply if your account is "participated" in by a third party or if you allow someone else to conduct transactions on it.

Is Coinbase Regulated?

Coinbase complies with all US financial services laws and regulations. This includes compliance with both state and federal law regarding consumer protection, the prevention of money laundering, and cybersecurity.

Coinbase is licensed by several state authorities to engage in money transmission or serve as a money transmitter. It's also registered with FinCEN, the US Financial Crime Network, which requires bitcoin exchanges to follow rules designed to help prevent money laundering.

Coinbase works closely with the US government and law enforcement agencies, which include sharing information about illegal activities on our platform. The company also voluntarily complies with requests for information when it's required by law to do so.

Is Coinbase Scam?

Safe U.S. Stock Brokers With Cryptocurrencies

Conclusion: Is Coinbase a Scam?

With a recent bankruptcy of FTX, Voyager, and Celsius, it is hard for us to recommend any crypto broker or crypto exchange. It is much safer to open an account with one of the stockbrokers mentioned above which also offer access to cryptocurrencies. With these firms, you have SIPC insurance up to $500,000 and FINRA/SEC oversight.

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Ben Wright
About the Author
Ben Wright is an investor, a trader, an educator, and something of an explorer. He spends his days in the markets when he is not teaching or spending time with his family. Ben writes about stockbrokers, markets, investment vehicles, promotional offers, and tools that help investors make the most of their time in the markets.