Coinbase holds your cryptocurrency on your behalf in a custodial arrangement, meaning Coinbase controls the private keys to your assets, though it represents that your assets are segregated from Coinbase's own funds.
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
Because Coinbase controls your crypto keys, you do not have direct ownership of the digital assets in the same way you would if you held them in your own wallet, and your assets could be at risk in the event of Coinbase insolvency.
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 →This agreement significantly affects consumers by requiring mandatory binding arbitration and waiving the right to participate in class action lawsuits, limiting access to the traditional court system for disputes. Coinbase retains broad discretion to suspend or terminate accounts, freeze funds, and modify or discontinue services with limited notice, which can directly impact access to your digital assets. You can opt out of the arbitration clause by sending written notice to Coinbase within 30 days of first accepting the agreement, as detailed in the dispute resolution section.
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The custodial structure raises significant questions under the SEC's custody rule and recent guidance on crypto asset accounting. Institutional custodians should note that Coinbase's representation of asset segregation does not eliminate insolvency risk, and the applicable regulatory protections differ materially from those available for securities held in traditional broker-dealer custody.
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Because Coinbase controls your crypto keys, you do not have direct ownership of the digital assets in the same way you would if you held them in your own wallet, and your assets could be at risk in the event of Coinbase insolvency.
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