Why does Coinbase impose a wait period on transfers?

[pomme7000]

Another newbie question. Yesterday I made my first purchase of bitcoin. To make the purchase, I used the Coinbase exchange, and I linked my Coinbase account to my PayPal account. The purchase proceeded without error and, a few seconds later, the Coinbase account screen showed that I now own some bitcoin. So far, so good. (FYI that I had a cash balance in my PayPal account, so the Coinbase purchase was a "cash" transaction, not a charge to a debit or credit card.)

Today I wanted to transfer the bitcoin from Coinbase to my cold wallet (Trezor). When I initiated the "send" transaction in Coinbase, however, a message appeared that I must wait 10 days before I can spend/send/transfer my bitcoin. On this, some thoughts come to mind:

1. Perhaps it is standard Coinbase practice, regardless of payment method, to impose a 10-day wait period before bitcoin can be spent/transferred?

2. Perhaps Coinbase imposes a wait period only when PayPal is used as the payment method (that is, Coinbase wants to wait until it receives the funds from PayPal before permitting bitcoin transfers)?

3. If I had used a different payment method, such as a debit card, would Coinbase still impose a wait period? What is the best payment mention to use to avoid wait times?

4. Do other centralized exchanges operate in a similar manner, imposing similar wait times? (Please note that, in relation to this post, I am not referring to decentralized exchanges.)

I'd like to understand this better before I make any subsequent purchases, so look forward to your responses. Thank you.

[1714994331]

1714994331

[1714994331]

1714994331

[1714994331]

1714994331

[o_e_l_e_o]

This is normal for Coinbase. See this response on Reddit from their customer support: https://www.reddit.com/r/CoinBase/comments/r2wit4/coinbase_pending_transfer_10_days/hm7az0g/. They put a hold of variable length in place on all orders, depending on the method you used to purchase the coins. PayPal is pretty notorious in the crypto world for being incredible easy to perform a chargeback and scam the other party, so it makes sense that the wait time is longer. From the response linked above, there is no hold time with debit card purchases.

[DaveF]

It's not just Coinbase / PayPal etc. It's many banks and financial institutions.
Usually a 10 to 14 day hold is long enough for fraud to be noticed if you compromised someones account and are taking money out of it.
Remember once you convert it to BTC / fiat whatever and move it, they cannot easily get it back.

If it's bank to bank (i.e. you made a payment to a credit card) the bank can claw it back from the receiver.
Once BTC is out of Coinbase and in your own wallet. It's yours, they can't get it back.

-Dave

[Iranus]

This is normal for Coinbase. See this response on Reddit from their customer support: https://www.reddit.com/r/CoinBase/comments/r2wit4/coinbase_pending_transfer_10_days/hm7az0g/. They put a hold of variable length in place on all orders, depending on the method you used to purchase the coins. PayPal is pretty notorious in the crypto world for being incredible easy to perform a chargeback and scam the other party, so it makes sense that the wait time is longer. From the response linked above, there is no hold time with debit card purchases.

Exactly, I used SWIFT network to purchase Cryptos in Coinbase, there is only a 1-3 days interval time, I don't have to wait 10 days to exchange cryptos from my Coinbase to other wallets.
Not only Coinbase but also other US-based exchanges follow the same chargeback rules that's why you have to wait a couple of days to get confirmed the status of your transactions.

anyway, As far I know Coinbase has turned off the funding system via Paypal for exchange accounts. they don't accept Paypal anymore as a payment method for the exchange accounts.

[PrimeNumber7]

What is the best payment mention to use to avoid wait times?

The best way to avoid wait times when purchasing bitcoin is to use a payment method that is not reversible.

Coinbase may allow you to pay with some reversible payment methods, such as via a debit card that result in you having to wait a shorter wait time until you can withdraw the purchased coin to your trezor. Some of these payment methods may result in you paying a higher price, or a higher fee.

My advice is to use the payment method that results in you paying the lowest price, and to wait however many days to withdraw to your trezor.

[o_e_l_e_o]

Coinbase may allow you to pay with some reversible payment methods, such as via a debit card that result in you having to wait a shorter wait time until you can withdraw the purchased coin to your trezor.

See below:

In general, debit card purchases or wired funds from your bank to your Coinbase USD wallet do not affect your availability to cash out—if no restrictions exist on your account, you can use these methods to purchase crypto to send off of Coinbase immediately.

Some of these payment methods may result in you paying a higher price, or a higher fee.

OP, if you want to save fees, then look in to using Coinbase Pro rather than just plain old Coinbase. It requires you to learn how to place market orders, but it means your trading fee will be 0.5% or less (depending on volume), rather than up to 2.49% or even more (depending on payment method and size of purchase).

[pomme7000]

Thank you all. Very helpful.