Coinbase is a legitimate cryptocurrency exchange and broker. They have high profile investors from a highly regulated location – San Francisco.  Coinbase exchange is known to freeze any customer accounts that have suspicious activities.

What is special about San Francisco? Governments and industry officials are periodically having to confront the epidemic of ransomware. Hackers are able to freeze the computers, which they target and eventually they demand a payoff. The public-private task force are trying to use cryptocurrency regulation as the key to punish the wrong doers.

Companies, government agencies, hospitals and school systems are the victims of ransomware groups.  Central bank regulators and financial crime investigators worldwide are discussing about how cryptocurrencies should be regulated.

Those who look at cryptocurrencies as a refugee from national monetary policies and government oversight of individual’s financial activities do not like any kind of congressional action which pierces in to identifying the anonymity of cryptocurrency transactions.  Financial crime investigations require piercing into the anonymity of cryptocurrency transactions.

And, San Francisco regulators are, “There’s a lot more that can be done to constrain the abuse of these pretty amazing technologies.”

How does Coinbase Make Money? Coinbase makes their money from fees it charges on trades, maker and taker fees, interchange fees, interest on cash, sales of software tools, interest from personal loans, and more.

Coinbase have to state that they have never been hacked. Nytimes reported that about 0.004% of its users had experienced “account takeovers” in the past year.  Someone breached their devices and eventually gained access to their Coinbase accounts. The company eventually stated that they educated its users about keeping their accounts secure.

Law Suits:  Bitcoin.com reports that a class-action lawsuit has been filed against cryptocurrency exchange Coinbase, its executives, and investors over the company’s direct listing on Nasdaq.

“According to the complaint, the registration statement and prospectus used to effectuate the company’s offering were false and misleading,”

For clarity extracts from Investopedia:

Offering is the issue or sale of a security by a company. It is often used in reference to an initial public offering (IPO) when a company’s stock is made available for purchase by the public, but it can also be used in the context of a bond issue.

Prospectus A prospectus is a formal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. A prospectus is filed for offerings of stocks, bonds, and mutual funds. The document can help investors make more informed investment decisions because it contains a host of relevant information about the investment security.

Registration Statement In the United States, a registration statement is a set of documents, including a prospectus, which a company must file with the U.S. Securities and Exchange Commission before it proceeds with a public offering.

Reporting to tax Authorities:  Yes. Coinbase reports transactions to the IRS, if you meet certain criteria, before the start of the tax season. Traders will receive a 1099 form if they are paying US taxes, are a coinbase.com user.