All digital currency that Coinbase holds online is fully insured. This means that if Coinbase were to suffer a breach of its online storage, the insurance policy would pay out to cover any customer funds lost as a result.
The insurance policy covers any losses resulting from a breach of Coinbase’s physical security, cyber security, or by employee theft. The policy is provided by a syndicate of insurers through Lloyd’s of London.
Coinbase holds less than 2% of customer funds online. The rest is held in offline storage.
This insurance policy does not cover any losses resulting from the compromise of your individual Coinbase account. It is your responsibility to use a strong password and maintain control of all login credentials you use to access Coinbase and GDAX.
Coinbase stores all customer fiat currency (government-issued currency) in segregated, custodial bank accounts. The funds held in those accounts belong to Coinbase’s customers - not to Coinbase.
If you are a United States resident, your Coinbase USD Wallet is covered by FDIC insurance, up to a maximum of $250,000.
Even if Coinbase were to become insolvent, the funds held in the custodial bank accounts could not be claimed by Coinbase or its creditors. The funds held in those accounts would be returnable to Coinbase’s customers.