Why is Coinbase Asking for My SSN?

TL;DR- the answer is threefold: anti-money laundering, account security, and tax purposes. Technically speaking, they’re only asking for the last four of your social security number.

When registering with Coinbase in the US, the exchange will prompt you to hand over your personal information. This includes your address, last 4 of your social, phone number, etc. Don’t freak out- this is the same thing any bank would do (actually a little less).

When signing up, Coinbase will ask for the last four of your Social Security Number (SSN)

Is it safe to give Coinbase my Social Security Number?

My answer here is yes, it’s safe to enter the last four of your social into Coinbase when setting up an account.

First off, Coinbase actually doesn’t ask for your full social- just the last four digits.

Why is Coinbase asking for the last four of my social?

There are three biggies when it comes to why Coinbase is asking for this:

Account security and verification

Stuff happens to us because we’re human. We get locked out of our main account. We lose our phones. We forget our login credentials. Coinbase uses the last 4 of your social frequently to get you back into your account.

I wrote all about the issues and fixes that people can have with getting locked out of their Coinbase account.

Taxes, taxes, taxes

It’s the only thing for certain along with death and losing socks in the laundry, right? With your name, address, and the last 4 digits of your social security number, Coinbase reports your annual losses or gains to the IRS. In February of each year, Coinbase prints and sends its users a 1099 form including info on their gains & losses the previous year. Coinbase also sends a copy of this form to the IRS, to make sure users aren’t lying on their taxes.

Not financial advice, but just to make you aware, the US allows citizens to report capital losses up to $3,000 per calendar year. So if you’ve blown yourself up in crypto (and many have) you can save a bit on your taxes. I won’t get into it here- Google is your friend on this one.

Anti-money laundering laws

The US economy is the biggest in the world, with a GDP of $24 trillion. Despite what people say, there’s still tremendous opportunity to make money. The US taxes top incomes at high rates- so there’s plenty incentive for bad actors to get money off the books. I’m an optimistic red-blooded capitalist, but all systems have their downsides.

The same goes for the UK, Canada, Australia, the EU, and so on- if you hustle you can make a lot of money. Governments want their cut. It’s that simple.

Is there an exchange that doesn’t need my SSN?

Yes: KuCoin. KuCoin allows a certain amount of trading (<5 Bitcoin/day or something to that effect) without KYC. Here’s the problem though: KuCoin does not connect to bank accounts. You can deposit money into KuCoin with your credit card or debit card (with a 4% fee- yikes!), but there’s no means of cashing out. People can also send crypto to their KuCoin addresses. What most people do is fund their KuCoin account with one of these methods and then when its time to cash out from KuCoin they send to their ‘home’ exchange like Binance, Coinbase, FTX, or Kraken.

Careful with KuCoin, though- it isn’t licensed to operate in the US.At any moment, governments could take action and move to shut down access to the site within their borders. One more reason to keep your funds on a hardware wallet once you get them!


All this is a bit ironic because one of the main advanatages of cryptocurrency is that it’s supposed to be trustless. That means Bitcoin doesn’t care who you are- it doesn’t care what country you live in, what your credit score is, or your banking history. It’s simply a decentralized network that can quickly move value around. And here we are making people jump through hoops just to participate! Governments ruin everything.
Regardless of all the security measures Coinbase takes to protect its users and crypto, there’s still tremendous incentive for bad actors to hack the system and take your crypto. I’m a huge fan of holding your crypto on a hardware wallet to prevent this. When you ‘hold’ crypto on an exchange, technically all you’re carrying is an “I owe you” from the exchange for your funds. Why not just own your coins outright?

On taxes and money laundering- crypto has been in the political spotlight over the past couple of years. This is unlikely to change anytime soon. Governments will always want their percentage of your income- it’s important to play by the rules. There’s still tremendous opportunity to make money in crypto given that only 3%-4% of the world’s population owns it.

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