Coinbase Insured

[superbd]

Interesting. It's good to see Coinbase setting the standard here. Of course, employee infidelity and hacking are just two ways that bitcoins could disappear.

What about physical theft? Summary says that the insurance covers losses due to physical security breach, so presumably physical theft is covered. Missed that in the summary.
What about natural disasters, fire, flood, etc.?
What about kidnap/ransom/extortion of employees?
What about lawful confiscation (usually not covered by policies)?
What are the actual limits of the policy?
Are the limits on a per-account basis (like the FDIC), per occurrence basis, or per policy period?
Was the policy designed to cover the type of hacking that allegedly occurred with Mt. Gox?

Actually, Circle is setting the standard. They've already been insured by marsh - coinbase is catching up. circle is getting ready to haul past coinbase

[AaronCraig]

What about natural disasters, fire, flood, etc.?
What about kidnap/ransom/extortion of employees?

Exclusions include force majeure
https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured-

After thinking about your question more, I'm still unsure, since Kerpupples allegedly said it was due to Bitcoin's tx-malleability issue, and not MtGox itself. Not sure about this one, good question.

[Onanula]

What about natural disasters, fire, flood, etc.?
What about kidnap/ransom/extortion of employees?

Exclusions include force majeure
https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured-

After thinking about your question more, I'm still unsure, since Kerpupples allegedly said it was due to Bitcoin's tx-malleability issue, and not MtGox itself. Not sure about this one, good question.

"Force majeure" is a general term that encompasses a lot of different circumstances. I've never seen a policy exclude risks due to "force majeure" without defining precisely what those risks are. And in my experience, risks like war, riots, and civil unrest are usually excluded, while risks like flooding, fire, and other natural disasters are usually, but not always, covered.
I would not characterize kidnap, ransom, and extortion as force majeure.

And the whole transaction malleability issue - that might make a good insurance coverage case! (Which would be good for people like me, bad for everyone else.)

[wasserman99]

What about natural disasters, fire, flood, etc.?
What about kidnap/ransom/extortion of employees?

Exclusions include force majeure
https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured-

After thinking about your question more, I'm still unsure, since Kerpupples allegedly said it was due to Bitcoin's tx-malleability issue, and not MtGox itself. Not sure about this one, good question.

"Force majeure" is a general term that encompasses a lot of different circumstances. I've never seen a policy exclude risks due to "force majeure" without defining precisely what those risks are. And in my experience, risks like war, riots, and civil unrest are usually excluded, while risks like flooding, fire, and other natural disasters are usually, but not always, covered.
I would not characterize kidnap, ransom, and extortion as force majeure.

And the whole transaction malleability issue - that might make a good insurance coverage case! (Which would be good for people like me, bad for everyone else.)

It is not hard to protect yourself from malleability issues. I would highly doubt that coinbase wold suffer any losses due to malleability.

When gox disclosed their losses due to malleability, other major exchanges temporary suspended withdrawals, however none of them were vulnerable and were able to resume withdrawals without changes to their processes.

[NikkieBeraj]

What about natural disasters, fire, flood, etc.?
What about kidnap/ransom/extortion of employees?

Exclusions include force majeure
https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured-

After thinking about your question more, I'm still unsure, since Kerpupples allegedly said it was due to Bitcoin's tx-malleability issue, and not MtGox itself. Not sure about this one, good question.

Might want to check, but several months ago a story circulated with proof that fewer than ~200 BTC were ever stolen due to tx malleability. If this specifically was the claim Mark made, then it's a lie.

[Jeramom]

Interesting. It's good to see Coinbase setting the standard here. Of course, employee infidelity and hacking are just two ways that bitcoins could disappear.

What about physical theft? Summary says that the insurance covers losses due to physical security breach, so presumably physical theft is covered. Missed that in the summary.
What about natural disasters, fire, flood, etc.?
What about kidnap/ransom/extortion of employees?
What about lawful confiscation (usually not covered by policies)?
What are the actual limits of the policy?
Are the limits on a per-account basis (like the FDIC), per occurrence basis, or per policy period?
Was the policy designed to cover the type of hacking that allegedly occurred with Mt. Gox?

Actually, Circle is setting the standard. They've already been insured by marsh - coinbase is catching up. circle is getting ready to haul past coinbase

Marsh is a broker, not an insurer.

[WineAndWhiskey]

wonder if by "online storage" they mean the percentage they keep available to trade (didn't they say this is like 3% or something?), or their cold storage wallets.

Good catch! According to their security page https://coinbase.com/security:
Up to 97% of customer funds are stored offline
AND
Funds not stored offline are covered by insurance
So yeah, only hot (online) storage is insured.

[Gogo ppp]

Interesting. It's good to see Coinbase setting the standard here. Of course, employee infidelity and hacking are just two ways that bitcoins could disappear.

What about physical theft? Summary says that the insurance covers losses due to physical security breach, so presumably physical theft is covered. Missed that in the summary.
What about natural disasters, fire, flood, etc.?
What about kidnap/ransom/extortion of employees?
What about lawful confiscation (usually not covered by policies)?
What are the actual limits of the policy?
Are the limits on a per-account basis (like the FDIC), per occurrence basis, or per policy period?
Was the policy designed to cover the type of hacking that allegedly occurred with Mt. Gox?

Setting the standard for what, deception? 97% of deposits are offline and therefore uninsured.

Things like this are very disturbing, and contribute to the overall feeling for myself and others that this is a sketchy company.

The more open and transparent they can be, the more trust can be gained.
Making deceptive statements causes a lack of trust that can take a long time to be regained.

[keithers]

I have little by little started moving the holdings that i had over at coinbase over to different clients (in which I control the private keys).   When I first started in BTC, Coinbase was the most natural fit because it was the easiest and fastest way for me to buy and store BTC.

Don't get me wrong, I still use Coinbase whenever I need to buy small amounts of BTC, but as they have grown and grown, I don't want to get into a position where for some reason accounts get frozen and then I lose access to that part of my holdings.

I just leave a small amount now over at Coinbase for when I need to sell a little (which is rare).   I keep my savings elswhere.   

It is cool that they have have made the fact that they are insured public.   The problem is that they are insured...not necessarily the users..

[yitingyou]

I want to know insured by which insurance company

[keithers]

I want to know insured by which insurance company

Coinbase is insured by Aon (who Coinbase states that they are the world's largest insurance broker).   I am not sure if they are the largest or not.

Here is a link to their website:  http://www.aon.com/default.jsp


Again, let me reiterate, that Coinbase has stated that THEY are insured for holding your coins.  YOU are NOT insured against your log-ins being compromised and losing coins as a result...

[12inchdick]

It specifically does not insure against individual users' bitcoins being stolen

[CokeCoin]

This is awesome, but I'm still going to store my btc offline.

[GTA]

Coinbase, what is the claim procedure and where is the fineprint pease?

[Summer,69]

So... what about insurance on your cold storage? Are you keeping that a secret from everyone for another year, as well?
Oh, wait, I'm guessing you don't have any, and that 97% of your (our) bitcoin are completely uninsured.
Fail.

[polunna]

"Coinbase is insured against theft and hacking in an amount that exceeds the average value of bitcoin we hold in online storage at any given time."

Yet elsewhere you claim that only 3% of deposits are online, so 97% of deposited bitcoin are uninsured.
Are we supposed to pretend that the 97% offline have zero risk of theft? If that was true why aren't those 97% insured also?
Wow. Sneaky.

I think the idea is that the hot wallets are the ones that are most at risk. By insuring them, you decrease the risk of a financial loss if something happened to them.
Of course, there's always a risk that the insurer will be insolvent when it comes time to pay the claim. You can attempt to re-insure your way out of that, but at the end of the day, there will always be some risk.

[bambino]

"Coinbase is insured against theft and hacking in an amount that exceeds the average value of bitcoin we hold in online storage at any given time."

Yet elsewhere you claim that only 3% of deposits are online, so 97% of deposited bitcoin are uninsured.
Are we supposed to pretend that the 97% offline have zero risk of theft? If that was true why aren't those 97% insured also?
Wow. Sneaky.

I think the idea is that the hot wallets are the ones that are most at risk. By insuring them, you decrease the risk of a financial loss if something happened to them.
Of course, there's always a risk that the insurer will be insolvent when it comes time to pay the claim. You can attempt to re-insure your way out of that, but at the end of the day, there will always be some risk.

Great, so insuring the offline wallets should be inexpensive and easy to do, right?

[QuestionAuthority]

It specifically does not insure against individual users' bitcoins being stolen

That depends on what you mean by "stolen".

In reference to your forum name: Do you want one, do you have one or do you like to play with them? It's not really clear.

[Nagle]

Coinbase, what is the claim procedure and where is the fineprint pease?

Right. Is Coinbase, the company, insured, or are Coinbase's customers insured?

This is a huge difference. If Coinbase goes broke, like Mt. Gox, and only the company is insured, you lose. If the customer's balances are insured for the benefit of the customer (as is the case with US banks (FDIC, up to $250K) and brokers (SIPC, up to $500K), you get paid back.

If the customers were actually insured, they'd have the insurance terms and carrier publicly posted. They don't.

[knifeedge]

This is good to hear but still doesn't mean keep your Bitcoin savings in Coinbase.