Coinbase, a popular cryptocurrency exchange, is set to introduce a new feature that allows users to recover lost assets sent to unsupported blockchains like BNB Chain and Polygon. In an announcement made on February 27, Coinbase explained that users would only need to provide their transaction ID and inbound Coinbase wallet address to retrieve their assets.
Previously, it was difficult to recover these assets because Coinbase employees and support channels did not have access to the private keys required to reverse the transactions. However, Coinbase has now developed a solution to address this issue. For assets valued under $100, users will not be charged a fee for the recovery process. However, for amounts over $100, a commission of 5% will be applied.
Crypto exchanges, including Coinbase, typically use multisig wallets that support multiple blockchains and assets, even if they do not display all tokens or networks on their user interface due to regulatory compliance reasons. Although it is technically possible to retrieve wrongly sent assets, it requires substantial time, effort, and coordination from senior executives who have control over the exchange’s multisig wallets.
In 2022, Binance, another major cryptocurrency exchange, charged $500 for each retrieval of wrongly sent crypto assets. In comparison, Coinbase’s recovery tool has already recovered $160 million worth of lost digital assets from the Ethereum blockchain since its inception. Currently, there are approximately 3,000 ERC-20 tokens mistakenly sent to Coinbase via BNB Chain and 800 such tokens sent via Polygon.
Coinbase is committed to expanding the capabilities of its recovery feature to support additional assets and networks. However, due to the technical complexities involved in recovering unsupported assets, the exchange cannot guarantee that all assets will be eligible for recovery in the future.
In a related incident, a user of a crypto exchange disappeared after receiving $650,000 by mistake.