This analysis describes what Coinbase's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
The clause discloses the legal status of customer assets under insolvency, establishing that cryptocurrency holdings are not segregated from Coinbase's corporate assets and would be subject to bankruptcy distribution procedures rather than held in protected custodial accounts.
The updated terms establish a new arrangement for USDC designated as 'Secured USDC' in connection with the Coinbase One Card. Under the revised language, if you designate USDC in your wallet as Secured USDC, you agree that Coinbase may transfer that amount to a third party designated as the secured party, and you will be restricted from withdrawing or transferring those funds. Additionally, the secured party's instructions to Coinbase regarding those assets take priority over any conflicting instructions you provide. The agreement states that you consent to all such permitted transfers. This arrangement operates independently of amounts owed to Coinbase, meaning Secured USDC will not be debited to satisfy debts you owe to Coinbase.
View change record →The updated terms eliminate language that previously allowed Coinbase to restrict your withdrawals if you designated USDC as Secured USDC and to comply with third-party secured party instructions without your consent. Under the revised agreement, Coinbase will not transfer, loan, or otherwise handle your Supported Digital Assets except as required by law or as you instruct. This means the One Card Secured USDC mechanism is no longer integrated into the core asset protection clause, and users no longer face withdrawal restrictions or loss of instruction authority tied to that designation. If you currently hold Secured USDC under a separate One Card cardholder agreement, that agreement remains in effect but is no longer cross-referenced in the main User Agreement's asset protection section.
View change record →The updated terms establish a new exception to the prior prohibition on transferring user digital assets. Previously, Coinbase stated it would not transfer assets except as required by law or per user instruction. The revised language now permits Coinbase to transfer USDC designated as 'Secured USDC' to third parties pursuant to a Coinbase One Card cardholder agreement. Users who elect to use this feature agree they will be restricted from withdrawing or transferring the secured portion, and they consent to Coinbase following instructions from a designated secured party without further user approval, even if those instructions conflict with the user's own orders to Coinbase. The full terms of this arrangement are stated to be in Appendix 4, which is not included in this summary.
View change record →Users operating under this provision accept that cryptocurrency assets deposited on Coinbase are subject to insolvency risk as unsecured creditor claims, meaning recovery in bankruptcy depends on the company's asset position and distribution priority rather than guaranteed asset return.
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"In the event of a bankruptcy, Coinbase's customers would be treated as our unsecured creditors. This means that Coinbase's customers with cryptocurrency assets on our platform could lose some or all of the value of their assets in the event of Coinbase's bankruptcy. Coinbase currently holds a portion of customer funds in custodial accounts. Coinbase holds cryptocurrency assets on your behalf and you may not be able to recover these assets.— Excerpt from Coinbase's Coinbase User Agreement
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The clause discloses the legal status of customer assets under insolvency, establishing that cryptocurrency holdings are not segregated from Coinbase's corporate assets and would be subject to bankruptcy distribution procedures rather than held in protected custodial accounts.
Users operating under this provision accept that cryptocurrency assets deposited on Coinbase are subject to insolvency risk as unsecured creditor claims, meaning recovery in bankruptcy depends on the company's asset position and distribution priority rather than guaranteed asset return.
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