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> The insurance covers losses due to breaches in physical or cyber security, accidental loss, and employee theft. I'm not convinced that this even protects the

> The insurance covers losses due to breaches in physical or cyber security, accidental loss, and employee theft. I'm not convinced that this even protects the online wallet against Mt Gox style corporate malfeasance, where much of the damage was done as an intentional corporate decision by the leadership. (I'm conjecturing that's what happened at Mt Gox; regardless, this seems not to cover against them trying something intentionally with their coins related to trading, and then losing them all.) Additionally, as you pointed out, this only covers a very small portion of their holdings - a percentage smaller than the number of Mt Gox coins that were "recovered" (about 25%). Finally, Coinbase being insured against the value of the bitcoin loss doesn't translate in to you being covered, as Coinbase may accrue other debts they have to pay off before your holding in the event of a hack large enough to cause a serious business disturbance, such as paying off creditors with higher standing.

nostromo 12y ago
That's key: Coinbase is insured. With FDIC, the depositor is insured, not the bank. This is the bank being insured, not the depositor.
- ewoodrich 12y ago
  And in the case of FDIC, evidence of gross malfeasance on the part of the bank would likely result in a seizure of the bank and its assets. The FDIC then becomes the "receiver"[1], entrusted with ensuring as many of remaining funds can be returned, and any covered and outstanding amount paid by the insurance. [1] https://www.fdic.gov/about/strategic/strategic/receivership.html https://www.fdic.gov/about/strategic/strategic/receivership....
larrys 12y ago
"Finally, Coinbase being insured against the value of the bitcoin loss doesn't translate in to you being covered" Additionally I'm very curious why they never disclosed this publicly before. It's a decent marketing and selling point so there must be some reason they decided (or were required) to keep it under wraps for so long.

nostromo 12y ago

That's key: Coinbase is insured. With FDIC, the depositor is insured, not the bank. This is the bank being insured, not the depositor.

ewoodrich 12y ago
And in the case of FDIC, evidence of gross malfeasance on the part of the bank would likely result in a seizure of the bank and its assets. The FDIC then becomes the "receiver"[1], entrusted with ensuring as many of remaining funds can be returned, and any covered and outstanding amount paid by the insurance. [1] https://www.fdic.gov/about/strategic/strategic/receivership.html https://www.fdic.gov/about/strategic/strategic/receivership....

larrys 12y ago

"Finally, Coinbase being insured against the value of the bitcoin loss doesn't translate in to you being covered" Additionally I'm very curious why they never disclosed this publicly before. It's a decent marketing and selling point so there must be some reason they decided (or were required) to keep it under wraps for so long.