The money and cryptocurrency you hold in your Coinbase account is not insured by the federal government — unlike a bank account (FDIC) or brokerage account (SIPC). If Coinbase fails, you could lose everything.
If Coinbase became insolvent or was hacked, your cryptocurrency holdings would not be covered by any government insurance program, and you could permanently lose your entire balance — a risk that is materially different from keeping money in a bank or brokerage.
Cross-platform context
See how other platforms handle No FDIC or SIPC Insurance Disclosure and similar clauses.
Compare across platforms →Most Americans assume financial accounts carry some government insurance protection; this provision makes clear that Coinbase account holdings carry the full risk of platform insolvency with no government backstop.
REGULATORY FRAMEWORK: The absence of FDIC coverage is governed by 12 U.S.C. § 1813 (FDIC-insured institution definitions, which exclude crypto platforms). SIPC coverage exclusion is governed by 15 U.S.C. § 78ccc. Coinbase's SEC Form S-1 risk factor disclosures (filed April 2021) explicitly acknowledged that custodied crypto assets may be treated as bankruptcy estate property under 11 U.S.C. § 541. FinCEN MSB registration does not provide any user asset insurance. The SEC's ongoing analysis of whether certain crypto assets are securities has implications for whether SIPC coverage could theoretically apply to specific tokens.
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