Coinbase
Exchange CustodyCoinbase is the largest US-based cryptocurrency exchange and the only publicly traded one (NASDAQ: COIN). Known for ease of use and regulatory compliance. Serves as custodian for multiple Bitcoin ETFs including BlackRock's IBIT.
Quick Verdict
With a Custody Score of 7.8/10, Coinbase is ranked #2 of 10 among exchange custody providers. Its strongest category is Regulatory and its weakest is Counterparty Diversification.
Analysis
Score Breakdown
The Custody Score is a weighted average across 8 criteria, each rated 1-10.
| Criterion | Score | Weight | Weighted |
|---|---|---|---|
| Security | 8 | 20% | 1.60 |
| Insurance | 7 | 15% | 1.05 |
| Regulatory | 9.5 | 15% | 1.43 |
| Fee Transparency | 6 | 10% | 0.60 |
| Track Record | 8.5 | 15% | 1.27 |
| Withdrawal Flexibility | 8 | 10% | 0.80 |
| Reporting & Audit | 9 | 10% | 0.90 |
| Counterparty Diversification | 2 | 5% | 0.10 |
| Total | 100% | 7.8 |
Key Features
- ✓Publicly traded (NASDAQ)
- ✓98%+ cold storage
- ✓ETF custodian (BlackRock IBIT)
- ✓FDIC on USD
- ✓Beginner-friendly interface
- ✓Coinbase Vault for extra security
Fee Breakdown
| Setup Fee | Free |
| Annual Custody Fee | None |
| Transaction Fee | ~1.5% (Simple) / 0.05-0.6% (Advanced) |
| Withdrawal Fee | Network fees |
| Notes | Simple interface has higher fees. Advanced trading has competitive fees. |
Security Details
Key Management
Institutional cold storage system
Cold Storage
98%+
SOC Compliance
SOC 2 Type 2
Penetration Testing
Yes
Incident History: 2021 account takeover attacks (phishing, not platform breach)
Insurance Coverage
Coverage
Crypto insurance for hot wallet portion. FDIC on USD (up to $250K).
Carrier
Crime insurance policy
Details
Publicly traded company. FDIC insurance on cash. Crypto hot wallet insured.
Regulatory Status
Licenses
- NASDAQ listed (COIN)
- FinCEN MSB
- NY BitLicense
- State licenses
- Multiple international licenses
Most regulated US exchange. Publicly traded. Custodian for multiple Bitcoin ETFs.
Pros & Cons
Pros
- Publicly traded — maximum transparency
- Custodian for BlackRock and other ETFs
- 98%+ cold storage
- Most regulated US exchange
- Beginner-friendly with Coinbase Vault
Cons
- High fees on Simple interface (~1.5%)
- Exchange custody — you don't hold keys
- Customer support complaints
- Single custodian risk
- 2021 phishing-related account compromises