Coinbase Data Sharing Policy Takes Effect on 22nd January 2023
On 23rd December 2022, Coinbase publicly announced that they would be sharing and selling customer data for marketing purposes as well as other business related purposes. According to their notice, this includes both active and former customers:
“If you are a new customer, we can begin sharing your information 30 days from the date we sent this notice. When you are no longer our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing.”
Reddit User Claims Coinbase Ignores Opt Out Requests for Data Sharing
This is in accordance with U.S. financial law allowing users to opt out of financial and personal data sharing for marketing purposes under the Gramm-Leach-Bliley Act (GLBA). However, according to Reddit user u/durg0n, they had repeatedly request to opt out of data sharing with Coinbase over the past month, but Coinbase did not respond to their request.
Despite the Reddit user filing a complaint with the Consumer Financial Protection Bureau (CFPB) and even closing their account in protest, Coinbase still did not agree to limit data sharing with marketers and affiliates.
How to Opt Out of Coinbase Data Sharing?
Based on feedback from other Reddit users, Coinbase customers can try the following methods to opt out of Coinbase’s data sharing.
If you have a current/active account, there is an opt-out setting on the website/app people are reporting success with:
Website: Settings > Privacy > Share my Personal Info
App: The 9 dots in the corner > Profile and Settings > Privacy > Share my Personal Info
Note — You should double-check it is properly set as it seems to be defaulting to sharing enabled, even in Europe.
Not all locations appear to have the opt-out setting available (ex: Argentina). If you live in such a country, try contacting Coinbase Support to opt-out manually.
If you have a closed/former account, the only option is to contact Coinbase support. Reddit user u/durg0n has tried this method, but mentions it is still worth a try.
If you have an old open account, you may be forced to agree to the new Terms of Service (ToS) in order to access the privacy settings. Please note that the newer ToS’s include other forms of data sharing and arbitration. Accepting it may open you up to data being used in other ways and limit your legal rights. According to Reddit comments, it is probably better to deal with Coinbase Support and send in a written request. But you could accept the new TOS and use the website to opt-out if you don’t care about the TOS.
If you have already ‘deleted’ your data, you should write in and opt-out anyway. Coinbase retains some ‘deleted’ data of former customers (ostensibly required for regulatory purposes), and this may be subject to the data sale. u/durg0n suggests writing in to Coinbase Support that you wish to limit data sharing to be safe, and carefully read the reply to see if they actually did it or not.
Cryptocurrency exchanges have been the central trading platform in the crypto space. Traders worldwide have made substantial returns on their investment just from pressing a couple of buttons. This has attracted many others to join in hopes of profiting from trading crypto.
However, one of the key factors in successful trading is finding the right crypto exchange. With hundreds of crypto exchanges available, everyone is constantly asking “which crypto exchange is the best?” Traders want to make the most of their investments, whether it be low trading fees or lucrative services. In this article, we will be comparing two of the top crypto exchanges in the world: Binance and Coinbase.
Binance is the world’s most popular crypto exchange by a large margin. It is rank one in organic trading volume per day ($14 billion at the time of writing) and in website and app user session (87 million visits).
Binance was founded in 2017 by Chengpeng Zhao (CZ), former Chief Technology Officer of OKCoin who had years of experience developing high-frequency trading softwares.
Binance’s Milestones
For the longest time, the cryptocurrency industry is dominated by Binance. The exchange is held in high regard for being proactive and astute in their planning and actions, not only for themselves but also for advancing the crypto space as a whole.
Founded in 2012, Coinbase is one of the earliest crypto exchanges in the world. Unlike other exchanges, Coinbase is based in the U.S. and subject to its regulations. As such, it is the largest cryptocurrency exchange in the U.S. by trading volume.
Key Features of Coinbase
Coinbase is split into several categories catering for different types of users. Coinbase itself is for retail investors, and only offers spot trading, unlike other exchanges which offer other products such as derivatives or futures trading.
Coinbase Pro is for individual professional traders, and Coinbase Prime is for larger institutional clients. Both platforms provide charting tools, real-time order books, among other tools to help advanced traders make the most of the exchange. Moreover, they also have cheaper transaction fees and more supported cryptocurrencies compared to Coinbase.
Nevertheless, Coinbase remains one of the top crypto exchanges in the world and will continue to be in the future. In fact, like Binance, Coinbase is also proactive, and has demonstrated time and time again the ability to turn unfavorable situations around.
In this section, we will take a closer look at what Binance and Coinbase have to offer and compare them based on these features:
Cryptocurrency and Products
Binance is the winner in terms of the number of cryptocurrencies supported. It has more than 600 coins and tokens compared to Coinbase which has over 100. This is because Binance’s spot market includes many different crypto categories such as GameFi, DeFi protocols, and even meme coins. On the other hand, Coinbase largely focuses on low-risk cryptos with a high market cap such as Bitcoin and Ethereum.
Moreover, Binance offers a wide array of trading tools such as leveraged trading, options trading and lending platform, whereas those features are only available on Coinbase Pro and Coinbase Prime.
Fees
The difference in fees between Binance and Coinbase is quite significant. Overall, Binance charges much less for trading crypto as well as funding your account. At the lowest-tiered account, Binance only charges 0.1% for their maker and taker fee. Its rate go as low as 0.02% at the highest-tiered account, which saves a lot of money for active traders.
Fortunately, we have a comprehensive guide that would allow you to avoid withdrawal fees. Click here to learn more.
On another note, since Coinbase is subject to U.S. regulations, users in the U.S. have to pay capital gains tax on profits made and staking rewards. Users are responsible for reporting all profits made as income on tax forms, even if it is just $1. According to Coinbase, if users earn $600 or more through the exchange, Coinbase is required to report those payments to the Internal Revenue Service (IRS).
Depending on the users’ location, Binance users do not have to pay taxes on their crypto gains. However, Binance.US also complies with U.S. tax laws, which means U.S. users also have to pay capital gains tax. Click here if you want to learn more about crypto tax-free countries.
Security
Both Binance and Coinbase have the highest cybersecurity score (AAA) audited by CER, the leading cybersecurity ranking and certification platform.
Both exchanges require Know Your Customer checks (KYC) in order to open an account, and provide two-factor authentication via SMS or the Google Authenticator app. They also store account funds in cold storage and crypto vaults off the Internet so that they cannot be hacked.
Though both have similar security protocols, Binance focuses more on access restriction, whereas Coinbase implements biometric access (i.e. fingerprints) for logins. Binance offers address whitelisting and device management to review and secure address books and devices, blocking other entries that users do not recognize. On the other hand, Coinbase has biometric fingerprint logins as well as AES-256 encryption and multi-signature security for digital wallets. This is because Coinbase has its own digital wallet, whereas Binance does not. But Binance partners with Trust Wallet, one of the most secure digital wallets with over 25 million users.
The main difference between both exchanges is that Coinbase is one of the only exchanges that offers FDIC insurance on USD deposits, insuring up to $250,000 of deposited USD funds which is similar to traditional banks. This also applies to Binance.US but not Binance. User funds on Binance are protected by reserves they have in their treasuries.
Conclusion
Although Binance and Coinbase are two of the top crypto exchanges in the world, they offer very different user experiences. With new features being added on a regular basis, Binance offers more than almost any exchange on the market as well lower fees.
On the other hand, Coinbase is a more reputable exchange on an institutional level. It was the first crypto exchange to be listed on the NASDAQ stock market with its market value reaching more than $100 million. This is an impressive milestone in propelling the crypto industry as whole as it signifies the recognition of cryptocurrency as tradeable securities in the global market.
Although its fees are high and offer less products compared to Binance and other exchanges, Coinbase has a slight edge in security compared to other exchanges as it is subject to U.S. regulations. It is also one of the few crypto exchanges that has its own self-custody crypto wallet.
But the bottom line is if you are looking for a wide variety of crypto products, Binance is the pick. Coinbase is better suited for beginners due to its spot market offering more secure long-term investments.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. (https://wbctx.com) As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
“Not your keys, not your crypto” — this decade-old mantra has taken full effect after the FTX collapse. Crypto users have lost faith in centralized exchanges (CEXs) and are migrating to decentralized exchanges (DEXs) instead. Though a non-custodial option seem to be an ideal solution, it would likely take a long time until price discovery shifts from centralized to decentralized platforms. Let’s take a closer look.
Impact of FTX Collapse on Centralized Exchanges
Almost every centralized platform in the crypto industry had done business with FTX, and some companies bore the brunt of the collapse such as BlockFi, Genesis Trading, and KuCoin. Crypto users around the globe found they could no longer withdraw assets from several crypto exchanges as the contagion spreads.
FTX’s collapse is a symptom of a problem inherent to centralized exchanges, also known as custodial exchanges. Customers’ tokens parked on the platform are exposed to the risk the exchange could go bust. Because crypto has no government depositary schemes to cover losses, customers of insolvent exchanges must wait for bankruptcy courts to regain what remains of their funds — if there is any left after other investors claim their share.
Given the circumstances, all crypto exchanges including Binance have been implementing proof-of-reserves to verify they have enough assets to cover all customers’ funds. Though it is a good transparency initiative, investors still fear for the safety of their funds. As a result, many CEX customers rushed to withdraw their funds, opting for non-custodial solutions. This is where DEXs come in.
Rise of Decentralized Exchanges after FTX Collapse
Soon after FTX’s downfall, decentralized exchanges saw a vertical spike in trading volume. According to DeFi Llama, the monthly DEX volume showed an increase of 80% from $57.6 billion in October to $103.8 in November. At the time of writing, Uniswap had the largest trading volume with 60%, followed by Curve (9.6%), PancakeSwap (9%), DODO Exchange (8%), and Balancer (3%).
Moreover, Uniswap also surpassed Coinbase in daily ETH trading volume on November 14 ($1.1 billion vs $600 million). This is significant as CEXs have always been dominant in trading large market cap coins given their deep liquidity. It strongly indicates traders are moving away from CEXs.
This is compounded by the fact that Bitcoin (BTC) has been exiting CEX wallets at a record pace. According to on-chain data analytics Glassnode, BTC withdrawals from CEX to self-custody wallets is unfolding at a historic rate of 106k BTC monthly. This accounts for $3.7 billion worth of Bitcoins over the past week. Simultaneously, hardware wallet providers such as Ledger and Trezor reported its highest sales day. Check out some of these wallets:
Decentralized exchanges, also known as non-custodial exchanges, are decentralized finance (DeFi) protocols that allow users to trade directly with other users via smart contracts, without handing over management of their funds to an intermediary or custodian.
They are non-custodial, which means users have full and exclusive control of their wallet’s private keys. This is the opposite of putting your assets on CEXs as they hold onto the wallets and keys on your behalf. This feature makes it impossible for centralized players to siphon user funds, and is why people are doing their trading on DEXs instead.
Transactions on DEXs are facilitated through the use of smart contracts, and liquidity pools are funded by other users. As such, there is significantly reduced counterparty risk — you do not need to trust other users, only the code. There are three types of DEXs that uses different protocols: automated market makers (AMM), order book DEXs, and DEX aggregators. But they are all programmed to determine the best price for an asset, all while offering a better rate for users compared to CEXs.
Moreover, anyone can earn passive income if they provide liquidity to the protocol. On the other hand, CEXs are managed by a centralized organization such as a bank or a small handful of professional trading firms or market makers. In this case, since liquidity is concentrated in these actors, CEX maker and taker fees are much higher than DEX swap fees. Additionally, they can also choose to withdraw their assets during periods of volatility, restricting trades when users need it most.
Challenges Facing Decentralized Exchanges
Despite the many critical advantages DEXs offer, it has several downsides that hinders widespread adoption:
Relies Heavily on Centralized Exchanges
Most DEXs are dependent on price oracles (i.e. Chainlink) that source data from CEXs. As such, an attacker can manipulate the price of an asset on a particular DEX, leading to inaccurate price data being fed to all protocols which rely on that DEX as a price oracle.
A flash loan attack is a common method to trick price oracles. In such events, attackers essentially create false arbitrage opportunities by instantaneously borrowing, swapping, depositing large numbers of tokens, tricking price oracles that the target token’s price is being moved on a single exchange.
This creates a disparity which can then be arbitraged, allowing the sale or purchase of assets at above or below market price. Polygon’s Quickswap was a victim of this attack in October 2022.
DEX Transactions are Slower than CEX
Trading on DEXs are often much slower because all trades take place on the blockchain. It takes time for blocks to be validated and transactions to go through. On the other hand, CEX trades are almost instantaneous because they take place on proprietary matching engines instead of the blockchain. These engines are complex software that synchronizes and combines data from thousands of trading pairs at the same time.
Liquidity Issues and Impermanent Loss
DEXs cannot yet compete with large CEXs in size as they cannot offer as much liquidity. When they do not have enough liquidity, large orders can incur slippages in which the buyer pays above-market prices on their order. As such, a lack of liquidity can deter institutional participation as large orders are likely to suffer from slippage.
On another note, liquidity providers are exposed to a risk of impermanent loss when depositing two assets for a specific trading pair. In most cases, liquidity providers end up withdrawing more of the token that lost value and less of the one that gained value because the ratio of tokens held in the pool changes as trades occur.
Smart Contract Vulnerabilities
Although there is significantly reduced counterparty risk when using DEXs, there is still the issue of smart contract vulnerabilities that can be exploited by hackers. Smart contract codes are publicly available and anyone can review their code. Therefore, exploitable bugs can still slip past audits and other code reviews.
In the wake of FTX’s collapse, users’ confidence in centralized exchanges are waning and the crypto community expects a shift toward decentralized platforms. However, according to JPMorgan and several other financial analysts, centralized exchanges will continue to control the majority of global digital-asset trading volumes. Although DEX trading volume has surged over the past month, it is a possibility that it reflects the automatic liquidations following the FTX collapse, and does not indicate the start of a long-term trend.
DEX users are still confined to a relatively small base of niche traders and investors, and their interfaces can be difficult to navigate. At this stage, CEXs still provide a better user experience, fiat gateways, and deeper liquidity. To date, Uniswap has a total of 4.5 million users cumulatively, whereas Coinbase has a total verified user base of 108 million.
With that being said, DeFi is still in its infancy. Development in liquidity protocols, safekeeping mechanisms, and user interfaces is needed to fully realize the potential of non-custodial trading services. As long as DEXs can compete with CEXs in terms of liquidity and speed, we may start to see widespread adoption or even a full-on switch to DEXs. After all, decentralized infrastructures are key to preventing centralized collapses, something we, as the community, has had enough of for the past year.
Ethereum Massively Scales to 100K Transactions Per Second Post-Merge, What Will Happen to “ETH Killers?”
Ethereum founder Vitalik Buterin addressed at the Ethereum Community Conference in Paris that the network will hit the 55% roadmap completion level after its much-anticipated “Merge” in September. The biggest problem that has been plaguing Ethereum is scalability. In its current state, Ethereum can only process 12 to 25 transactions per second with an average confirmation time of around six minutes. As a result, the network gets congested, leading to extremely high gas fees.
The shift from proof-of-work to proof-of-stake post-merge will enable Ethereum to process 100,000 transactions per second, according to Buterin, which is significantly higher than even centralized financial services like Visa and Mastercard. This will greatly benefit the ecosystem as users can enjoy instant transactions and low gas fees. So the question is, “What will happen to Ethereum Killer coins such as Solana or Avalanche?” If Buterin is able to deliver what he promised, then Ethereum will most certainly be the front-runner of all smart-contract platforms. The whole purpose of Ethereum Killers is to have a competitive advantage over Ethereum in terms of scalability. Will we see the end of Ethereum Killers after September?
Zipmex Suspends Withdrawals, Joins Growing List of Struggling Crypto Exchanges
Zipmex, a cryptocurrency exchange based in Southeast Asia, has frozen withdrawals until further notice due to “volatile market conditions” and the “resulting financial difficulties of key business partners.” Much like the rest of the crypto fallout, the insolvency of Zipmex’s counterparty has caused the company to face liquidity issues. According to their official statement, Zipmex’s current exposure to crypto lender Babel Finance is $48 million, with an additional $5 million to Celsius Network, which filed for bankruptcy last week.
With the series of defaults continuing to haunt the industry, investors should be cautious when dealing with any crypto exchange at the moment. Consider holding your funds in hardware wallets like Ledger Nano X, Ledger Nano S or Trezor Model T.
Coinbase Urges SEC to Begin Regulating Digital Asset Securities after Inside Trading Bust, Desperate Move?
Coinbase has called on the Securities and Exchange Commission (SEC) to develop a viable regulatory framework for digital asset securities following the arrest of a Coinbase ex-manager involved in inside-trading earlier today. With rumours of Coinbase’s insolvency growing, communities are speculating whether this initiative is an attempt to revive the crypto exchange. Coinbase has yet to comment on that matter but explained that the existing rules for traditional securities being inapplicable to crypto assets calls for new rulemaking. However, they also added that the procedure should involve the public’s input rather than behind closed doors. Will we be seeing Coinbase making a comeback or are they just delaying the inevitable?
Binance Unveils Scholarship Program! Future of Crypto Looking Good?
Binance is sponsoring a scholarship program that focuses on improving education that will empower the next generation of blockchain experts. Scholarships will be available for vocational education (currently for 1,000 Ukrainian students), for undergraduate studies and for master’s degrees, providing opportunities for scholars to acquire experience in the blockchain ecosystem.
This is a huge step forward as education in blockchain and cryptocurrency is still limited and inaccessible to most people, not to mention a growing pandemic of student loan debts worldwide. Fostering an environment for new talent means faster development in the space, especially when the future of crypto is at stake.
Key Features of Binance
