Crypto Archives | The Financial Geek

These days, our private information and online data is valued as much as it's ever been. But have you ever wondered why then we would need to provide our identification to sites like Coinbase when we sign up for an account? With over 73 million verified Coinbase accounts, that is one heck of a lot of user data the company is holding. Is Coinbase safe to give your ID to? Yes, Coinbase is a reputable and regulated platform that follows strict AML and KYC policies to protect user information and prevent fraud. So when providing Coinbas with your ID during the sign-up process, there is no need to worry about the safeness and legitimacy of the platform. Start Trading Crypto on Coinbase Today ($5)Earn a $5 in Bitcoin with Your Sign-upCoinbase is the easiest place to buy and sell cryptocurrency. Schedule buys daily, weekly, or monthly.Send and receive crypto to external walletsGreat Mobile ExperienceProtected by insuranceSign up for Coinbase Today Not only is Coinbase one of the largest crypto exchanges in the United States, but it is also used in more than 100 different countries around the world. So if you can trust Coinbase with your financial information and crypto assets, you can definitely feel safe about providing a photo of your driver’s license. And I don't say this blindy, I have been a Coinbase user since 2018 and have never experienced any sort of negative repercussions or privacy and data concerns for providing them with my ID. Is Coinbase Safe to Give My ID To? If there is one thing that Coinbase can hang its hat on, it is that its platform is secure and it always has the protection of its users in mind, and I have experienced this first hand. As I talk about in my article, Is Coinbase Safe? Is Coinbase Legit? (Here’s the Truth), Coinbase takes great pride in keeping its site and platform extremely secure. All traffic goes through an SSL certificate which encrypts the information on the website. Employee access is even restricted to the locations on the site where private user information is encrypted and stored. So even if a bad employee wanted to see your ID information, the information is encrypted and they simply wouldn't be able to. Coinbase did have one incident where it discovered that several thousand users' login and passwords had not been encrypted and were being stored in plain language. Luckily though, this issue was quickly resolved and corrected before anything malicious happened to the site. This also shows that Coinbase is diligent with its security and finds issues before any hackers do. Why Does Coinbase Need My ID? It’s a great question and really, in this day and age, why does any site need your ID? But why exactly does Coinbase need my ID? Coinbase, like most regulated cryptocurrency exchanges, is required to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) laws. These laws mandate that Coinbase collect identification information from its users to prevent illegal activities such as money laundering and fraud. What are the KYC regulations? They are guidelines put in place by countries around the world to limit fraud against financial institutions like Coinbase. The main underlying goal of KYC is to prevent any company or business from being utilized for money laundering or other financial criminal activities. Since the cryptocurrency markets are mostly unregulated, it is even more important for exchanges to abide by KYC regulations. Coinbase uses KYC to prevent criminals or individuals from creating fraudulent accounts that can be used to move money around the globe anonymously. While the crypto industry is built on the principle of decentralization, it is also important that it does not become a safe haven for criminals to transfer illicit funds. Can I Trust Coinbase with my ID? Absolutely! As I stated above, Coinbase keeps all of this information secure and encrypted. According to Coinbase's Frequently Asked Questions section on their website, Coinbase collects user data like identification for KYC regulations and to further improve their products and services. Coinbase also assures its customers that it does not sell any of its user's personal data or identification to any third parties, which should come as a relief to Coinbase users, including myself. Related Financial Geek Article: Does Coinbase Ask for Your SSN? And Why? We have seen now for years how personal data can be used as an online currency between big tech companies, so in my opinion, it’s really nice to know that all of the information you provide stays within Coinbase’s site. Should I Give Coinbase my ID Information? If you want to use Coinbase’s products and services you will have to. But of course, that decision is ultimately up to you. With that said though, any major crypto exchange in the US and in most countries around the world are going to require you to provide some sort of identification when you sign up for an account. And since this is the case, you might as well trust it with a reputable company like Coinbase. Not only that, but as far as cryptocurrency exchanges go, Coinbase has a lot more to lose then others. Since April of 2021, Coinbase has been publicly traded on the NASDAQ exchange under the ticker symbol NASDAQ:COIN. So not only does Coinbase have to abide by KYC regulations, it also needs to answer to agencies like FINRA and the SEC. On top of this, if Coinbase were to lose personal data, get hacked, or be caught using your data and ID for other purposes, their share price would immediately plummet. For publicly traded companies, any sort of negative headlines can have a serious effect on stock price and therefore the actual value of the company itself. Recommended Financial Geek Article: Will Coinbase Refund Me If Hacked? (We Asked Coinbase) Can I Not Give my ID to Coinbase? If you don't provide ID to Coinbase when signing up for an account, you won’t be able to use the Coinbase exchange for trading cryptocurrencies. Coinbase explicitly states in its Frequently Asked Questions that if you do not provide your identification, your account will be restricted. So at the end of the day, you won’t be able to do any sort of trading on Coinbase until you provide your identification. It’s easy to see why providing something like a driver’s license or passport might not sit well with some users. Unfortunately for them though, Coinbase needs to abide by the anti money laundering laws and collect the proper identification of all of its verified users. You can try to fight it, but Coinbase’s hands are tied. But again folks, rest assured your identification or personal data won’t publicly appear anywhere. Your Coinbase wallet address will remain anonymous so you don’t have to worry about the platform revealing your identity. There really is no way around providing your identification to Coinbase when you sign up to use their products and services. Bottom line. Conclusion: Is Coinbase Safe to Give my ID to? Absolutely! As far as crypto exchanges go, Coinbase has a clean history of hacks and is one of the most secure exchanges in the industry. Coinbase abides strictly by the KYC anti money laundering regulations, and requires your identification if you want to sign up for an account. Coinbase is also a publicly traded company so it needs to uphold a clean image to appeal to its shareholders and new investors. Even if you don’t agree with it, providing your ID to Coinbase is perfectly safe! Geek, out.