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Not Your Keys: A Closer Look at Bitcoin Exchanges' User Agreements - Part 1


Exchanges. They are usually the first place you go to buy Bitcoin for the first time. You make an account. Transfer money. Buy some coin. Easy.

And for a good portion of people, that's it. Your coins are left on the exchange. Are those your coins? Are they under your control?

Well when you made that account, there were some terms and conditions and user agreements you signed. Did you read them? They had very important details you agreed to.

If not, we looked into some of the most popular exchanges. We read their user agreements and put some questionable statements together.

Disclosure: We aren't lawyers. Our interpretation may not be 100% accurate. Read the text.

Part 1: Coinbase

https://www.coinbase.com/legal/user_agreement

No Forked or Airdropped Coins

Unless specifically announced...Supported Digital Currencies excludes all other protocols and/or functionality...This exclusion includes but is not limited to: metacoins, colored coins, side chains, or other derivative, enhanced, or forked protocols, tokens, or coins or other functionality, such as staking, protocol governance, and/or any smart contract functionality...Coinbase is not configured to detect, secure, or process these transactions and functionality. Any attempted transactions in such items will result in loss of the item.

Suspend Operations At Anytime

We do not own or control the underlying software protocols...Coinbase reserves the right to takes such steps as may be necessary to protect the security and safety of assets held on the Coinbase platform, including temporarily suspending operations for the involved digital currency(ies), and other necessary steps;

Seize Your Coins

...Coinbase may not grant a security interest in the Digital Currency held in your Digital Currency Wallet. Except as required by a facially valid court order...

CANNOT Withdraw Your Coins At Anytime

...At any time, subject to outages, downtime, and other applicable policies, you may withdraw your Digital Currency...

Don't Control Your Keys

As long as you continue to custody your Digital Currencies with Coinbase, Coinbase shall retain control over electronic private keys...

No Protections, No Insurance

You acknowledge that Digital Currency is not subject to protections or insurance provided by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

The Right To Cancel Accounts, Block Transactions, and Freeze Funds

We reserve the right to cancel and/or suspend your Coinbase Account(s) and/or block transactions or freeze funds immediately and without notice if we determine, in our sole discretion, that your Account is associated with a Prohibited Use and/or a Prohibited Business.

May Terminate Access or Deactivate Your Account

Coinbase may: (a) suspend, restrict, or terminate your access to any or all of the Coinbase Services, and/or (b) deactivate or cancel your Coinbase Account(s) if: (i) We are so required by a facially valid subpoena, court order, or binding order of a government authority; (ii) We reasonably suspect you of using your Coinbase Account(s) in connection with a Prohibited Use or Business; (iii) Use of your Coinbase Account(s) is subject to any pending litigation, investigation, or government proceeding and/or we perceive a heightened risk of legal or regulatory non-compliance associated with your Account activity; (iv) Our service partners are unable to support your use; (v) You take any action that Coinbase deems as circumventing Coinbase's controls, including, but not limited to, opening multiple Coinbase Accounts or abusing promotions which Coinbase may offer from time to time; or (vi) You breach our Behavior Policy.

Account Is Terminated, May Not Provide Notice

If Coinbase suspends or closes your account, or terminates your use of Coinbase Services for any reason, we will provide you with notice of our actions unless a court order or other legal process prohibits Coinbase from providing you with such notice. You acknowledge that Coinbase's decision to take certain actions, including limiting access to, suspending, or closing your account, may be based on confidential criteria that are essential to Coinbase's risk management and security protocols. You agree that Coinbase is under no obligation to disclose the details of its risk management and security procedures to you.

Account Deactivation, May Not Withdraw

You will be permitted to transfer Digital Currency or funds associated with your Hosted Digital Currency Wallet(s) and/or your USD Wallet(s) for ninety (90) days after Account deactivation or cancellation unless such transfer is otherwise prohibited (i) under the law, including but not limited to applicable sanctions programs, or (ii) by a facially valid subpoena or court order.

Use It Or Lose It

If Coinbase is holding funds (whether fiat currency or Digital Currency) in your account, and Coinbase is unable to contact you and has no record of your use of the Services for several years, applicable law may require Coinbase to report these funds (including fiat currency and Digital Currency) as unclaimed property to the applicable jurisdiction. If this occurs, Coinbase will try to locate you at the address shown in our records, but if Coinbase is unable to locate you, it may be required to deliver any such funds to the applicable state or jurisdiction as unclaimed property.

You're Hacked, Your Fault

We shall not bear any liability, whatsoever, for any damage or interruptions caused by any computer viruses or other malicious code that may affect your computer or other equipment, or any phishing, spoofing or other attack.