Two possibilities: For power users, if they forget their pw, they lose their coins. Period. That's the option I would use, as someone who never lost an importa

Two possibilities: For power users, if they forget their pw, they lose their coins. Period. That's the option I would use, as someone who never lost an important pw thanks to my use of redundant password safes. For other users, when creating an account, coinbase.com could email them a "key recovery" file (or mail them a physical QR code), with instructions to keep it permanently stored in a safe place. This key recovery file would be K encrypted with a unique IV and a key known by coinbase.com, who would not keep a copy of the key recovery file. This would satisfy all my requirements: coinbase.com would be unable to steal/access the users coins, and an attacker merely getting access to the key recovery file would be unable to do anything with it.