Even though it may seem that crypto trading is completely anonymous and without regulation, it isn’t so. Many exchanges do ask for certain verifications in order to protect both you and other users. So does Coinbase need SSN, or to be precise, what kind of verification does Coinbase ask from users when opening an account? Keep reading and find out.
Does Coinbase need SSN (or Social Security number)? The answer is yes, but only the last four digits. Coinbase, as one of the most trusted platforms, uses Identity Verification in order to comply with Know Your Customer regulations.
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However, the story doesn’t end on your SSN. Coinbase will collect other information and will ask you to submit certain documents in order to make sure you are who you say you are and that you are not involved in any criminal activity. So, let’s find out what you need to open a Coinbase account.
As we already answered, Coinbase will ask you to provide the last four digits of your Social Security Number. This is common practice among many trustworthy exchanges. In fact, if an exchange doesn’t ask you for any identification, it is a huge red flag, and you should be very careful about investing in that exchange. As a matter of fact, all financial institutions will ask for the same data, so why would it be different when it comes to crypto trading?
There are several reasons why Coinbase will ask to provide SSN when setting up an account. One of the first reasons is to verify your account and identity. Coinbase wants to know that it’s doing business with a real person, and the best way to check that is through your SSN. Also, once you set up the account, these four digits can be used to log in to the account in case you forgot your password.
The second reason is the IRS and taxes. As you may know, all gains or losses made on the Coinbase account must be reported to the IRS, and Coinbase is obliged to do so. It will be impossible to report your taxes without SSN as this number is also your tax identification number.
The third reason is money laundering. Crypto trading is unfortunately recognized by many criminals as an excellent way of trading and getting out the clean money. In case there is any investigation, Coinbase can help identify the users who are doing this through SSN.
If you have concerns about the safety of giving your personal information to Coinbase, you should rest assured that all your personal information is in safe hands. Once four digits of your SSN are verified by the platform, these data will be encrypted with AES-256 encryption. This kind of encryption creates a zero-knowledge network where even the platform can not see your info. So we can fairly say your information is pretty safe. But as you know, nothing in this world is completely unhackable, so if you wish to take extra precautions, you can do the following:
- Create a strong password, if possible one generated from a password manager,
- Set up 2FA authentication,
- Clean your computer from viruses and malware,
- Never connect to Coinbase using public WiFi.
The answer is no. Coinbase will not allow you to finish verification or to use the platform without SSN. With this being said, Coinbase will not allow you to open multiple accounts with the same SSN. You can have Coinbase and Coinbase Pro accounts on the same SSN, but these accounts will have to have the same login credentials.
In order to verify your account and identity, SSN is not the only data you will have to provide to Coinbase. For starters, you will have to provide your first and last name, date of birth, street address, and country of residence. When opening an account and filling out the information, ensure to put the same name as the name on your identification documents. You will have to take a picture of the document and submit it to Coinbase. Let’s see what documents are accepted and what are not:
|Location||Accepted identity documents||Unaccepted identity documents|
|USA||State-issued IDs such as a driver’s license or Identification Card|
United States passport
Resident Card (Green Card)
Temporary (paper) IDs
Public Services Card
United States Permanent
|Outside the US||Passport, National Identity Card, government-issued photo ID|
Is It Safe to Use Coinbase?
Is it safe to use Coinbase? It is one of the most popular platforms for crypto trading, and Coinbase does a very good job of keeping your information secure. And even though the whole idea of crypto trading was to be trustworthy, meaning people from all over the world could move money without any restrictions, it has proven that it can be harmful, at least for many people who lost money due to hacker attacks. However, these regulations and rules are there to keep you safe, and it is up to the country and platform whether they will implement these rules.
On the other hand, if you are not into these regulations, there are numerous platforms where you can trade without providing any of your personal data. And what you will use is totally up to you. If you wish to have more security and leverage, then trading on trustworthy platforms is something you will have to do.