Coinbase explicitly states that your cryptocurrency holdings and any fiat funds held in your account are not insured by the FDIC (federal bank insurance) or SIPC (brokerage account insurance).
Unlike money in a bank account or a traditional brokerage, if Coinbase becomes insolvent or is hacked, there is no government-backed insurance to recover your funds.
The absence of FDIC/SIPC coverage is a material risk disclosure that institutional clients must incorporate into their counterparty risk assessments; combined with Coinbase's custodial model, this creates concentration risk that requires specific treatment under fiduciary and investment management compliance frameworks.
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Coinbase's terms give the company significant unilateral power to freeze, suspend, or terminate user accounts with limited recourse, and cap the company's financial liability to just three months of fees paid β regardless of the value of assets affected. Cryptocurrency holdings on Coinbase are explicitly not covered by FDIC or SIPC insurance, meaning users bear the full risk of platform insolvency. You can opt out of the mandatory arbitration clause by sending written notice to Coinbase within 30 days of first accepting the agreement.