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How secure is the Coinbase app?

coinbase security

January 27, 2021 | 

JOHN K MWANIKI |  0 Comments| 

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If you have an interest in cryptocurrency, you have likely done some research. You are also likely to come across various reports on fraud and hacking attacks on many exchange platforms. Over the years, exchanges have become a hotspot for many fraudsters and scammers. Whether employees or outsiders, these exchanges continue to suffer a lot. In turn, many of their users lose a lot of money. 

Traders and potential investors question the security and legitimacy of the Coinbase app. They also ask whether it is safe to store their money in the Coinbase wallet. This article offers an in-depth look at the safety of the Coinbase app.

About Coinbase app

The Coinbase app is an American platform that facilitates the buying and selling of cryptocurrencies. With 40 different licenses, it legally operates in over 30 states. As a result, it is the world's leading crypto brokerage and exchange platform that supports only the best cryptocurrencies on the market. 

Depending on your locality, there are different payment methods available on the platform. They include bank transfers, credit/debit cards, SEPA transfers, PayPal, and wire transfers. The platform also allows its users to use fiat currency to buy and sell crypto. The payment will convert to bitcoin upon reaching the seller at no extra costs through its instant exchange feature.

The Coinbase app also has an easy-to-use interface that is very useful to first-time users. Thus, it is easy to register, buy, and sell cryptocurrencies on it. Experienced users can use Coinbase PRO, also known as Global Digital Asset Exchange. It has more in-depth features and analytics, ideal for an experienced trader. It also has lower transaction fees than the basic Coinbase platform. But, the Coinbase PRO version does not have a mobile-friendly application. Although, the site's mobile version works efficiently on smartphones and tablets.

Is the Coinbase App secure?

Coinbase has a license under the BitLicense Program in New York. It follows strict Know Your Customer (KYC) rules and regulations to ensure its user's identity. Anonymous individuals cannot use this platform as its KYC rules need every user to submit an official identification document. These rules and regulations are part of its Anti-Money Laundering policy.

The Coinbase app is very safe to use as it has put in place safety measures to protect its users. First, the company has a cover from the Federal Deposit Insurance Corporation (FDIC). The insurance policy covers up to $250,000 losses for U.S residents. The platform also operates on an encrypted SSL. Also, all Coinbase employees must undergo and pass a criminal background check. Upon getting the job, these employees must encrypt their hard drives.

Coinbase has also gone the extra mile to protect its user's personal information. In this case, the platform does not store most of its users' data on its online servers. Instead, it uses offline 'air-gripped' vaults located in different corners of the world. Furthermore, approximately 98% of user funds are in this type of storage. They are also stored separately from the company assets and funds.

Is the Coinbase app wallet safe?

As mentioned earlier, Coinbase App is one of the most reliable and trusted exchanges in the world. It has enhanced safety precautions and strict adherence to its rules and regulations. 

The Coinbase app allows its users to store their digital currency in the Coinbase app wallet. The wallet is in-built and allows users to store their crypto on the Coinbase platform. The wallet provides users with a public key and a private key. These keys enable them to do various transactions with other third-parties. 

It is the responsibility of the account-holder to ensure the safety of the wallet at all times. As a general rule of thumb, it is best to withdraw your crypto from your Coinbase wallet after buying it. Storing it in a hardware wallet reduces the risks of hacking and fraud. The platform provides two other options that users can use to store crypto for the long term. They include:

  • A standard wallet

A standard wallet is an ideal storage solution for those who want to store their crypto for a short term. You can make immediate payments from your Coinbase wallet to your bank account. The standard wallet allows you to save your crypto offline, keeping it safe from hackers.

  • Vault

If you want to store your cryptocurrency for a longer duration, the Vault is a better alternative. Users can store their crypto offline, meaning it is not accessible to hackers. Once you want to withdraw from the account, Coinbase will send an email to verify the request. The transaction will begin after 48 hours once confirmed.

How can you make your Coinbase app account more secure?

The Coinbase app guarantees the safety of its user's cryptocurrency investment and personal information. But, there are some steps that users can also take to safeguard their investment. They include:

  • Use strong passwords. Ensure your Coinbase app account has a long, random, and unique password. You can use a password manager, like Dashlane, to generate and store your unique password. 

  • Use two-step verification for your online accounts. It is advisable to use a security key for all your online accounts. You can also Time-Based One Time Passwords with a mobile authenticator app. But, if you cannot use these two options and your account is hacked, you can lock it down through your mobile service provider.

  • Ensure your devices are clean and up-to-date. Scan your devices regularly and ensure that they have active anti-virus protection. It is also vital to install an adblocker app, like uBlock Origin, in your browser to protect you from malicious advertisements

  • Bookmark Coinbase and stay alert for phishing websites. Coinbase users should bookmark the website to allow direct access and avoid phishing websites.

Conclusion

The Coinbase app has many trusted and reputable names in the finance sector backing it up. In turn, this speaks volumes when it comes to its legitimacy, reliability, and dedication to its users. Although we do not recommend storing your funds in the Coinbase wallet for a long time, the Coinbase app is definitely a secure platform for cryptocurrency investors. 

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