Trusted by millions of users worldwide, Coinbase offers several features and product offerings that its competition fails to deliver. Naturally, it boasts of such a strong user base due to the security and high liquidity the exchange has. However, beginners and experienced investors alike may sometimes have trouble withdrawing funds to a bank account. Many times, their Coinbase withdrawals end up getting rejected. This guide features all the major reasons why a user’s withdrawal request may be rejected along with solutions to overcome it.
Reasons Your Coinbase Withdrawal Failed
These are the most common explanations (and solutions) if a Coinbase withdrawal has been rejected or failed:
Why Are My Coinbase Withdrawals Rejected?
Withdrawing money from Coinbase can be rejected or postponed due to several reasons. While some may be caused due to the negligence of the user, others may be due to unforeseen situations. The most common reason is due to the blockchain network being busy, trying to withdraw above or below the limit, and attempting to send crypto to an incorrect wallet address.
Explanation of Why Coinbase Withdrawals Can Fail
Reason 1: Coinbase ID verification is pending
One of the most important factors that any investor considers while investing in a platform is its security. Naturally, it remains evident that a huge number of platforms fail at this, Fortunately, Coinbase is one of the most secure exchanges in the world, and constantly takes care of every measure required to maintain its reputation. For the same, KYC or Know Your Customer becomes an important part of the registration.
Know Your Customer is a simple verification process that requires users to provide their identification details as mentioned on the website. KYC helps Coinbase protect itself and its investors from any fraudulent activities like money laundering. Since the cryptocurrency domain has been criticized for being a medium for illicit activities several times, a KYC is required for being able to withdraw assets from the platform.
Solution. The simple solution here would be to complete the KYC process for Coinbase. Along with a certain set of identity verification questions, a user will be expected to upload documents like a driver’s license, passport, or any government-issued ID. To learn how long on average it takes to complete Coinbase verification, read this guide.
Reason 2: Withdrawing funds below the minimum amount
As with every other standard exchange, there is a minimum withdrawal amount on Coinbase too. This applies to cashing out or simply transferring cryptocurrencies from one place to another. There is an option on the platform to withdraw directly to the bank account or one’s debit card. While the minimum withdrawal of money may change occasionally, there is a fixed requirement for withdrawals for crypto. Coinbase does not allow the user to even go through with the withdrawal process at all if the amount mentioned is low.
Solution. The best option to avoid this is to ensure that the user tries to withdraw funds only if the desired amount is more than the minimum criterion.
Reason 3: Withdrawals above the daily limit
There are several risks that an exchange like Coinbase may need to face if there are no maximum limits on withdrawals. Undoubtedly, this also means that the users are also being exposed to any issues that may be caused due to hefty withdrawals by single investors or entities using the platform.
To maintain a healthy flow of liquidity while also minimizing the risk of any illegal activities, Coinbase has a pre-determined maximum withdrawal amount. Currently, this amount is set at $50,000 per day. It covers not only the withdrawals of funds to the bank but also the transfers between cryptocurrencies from one place to another. For example, this limit applies when withdrawing from Coinbase to Binance.
In short, if a user is looking to send BTC to another exchange or wallet, then they would only be able to make a transaction of BTC worth $50,000 or below. While deposits are unlimited, withdrawal limits are set across all products by Coinbase. However, one can go to the limits page of the platform and apply to be considered for higher limits.
Solution. Consider withdrawing amounts in smaller quantities. If the user is looking to withdraw a larger amount, then they can do so by withdrawing assets worth $50,000 daily. Alternatively, they can also apply for a higher limit as mentioned above.
Reason 4: Violation of Coinbase Policies
This is an extremely vital factor to be able to access or withdraw funds. There is a regulatory framework by Coinbase that every user is expected to adhere to. These are generally created in accordance with government policies of the respective countries the user belongs to. These policies are mentioned on the Coinbase website and have to be accepted by the user before signing up for the exchange.
A violation of these policies previously agreed upon by the user can end up in the individual getting banned from Coinbase. The ban simply implies trading on the platform. Thus, a person is free to withdraw their funds to another wallet. However, in rare cases, where the law dictates a need for an account to be frozen, Coinbase has the authority to make that happen. In short, if there is a violation of policies in an attempt to conduct illegal activities, then withdrawals may be stopped immediately.
Solution. The solution here is to simply comply with the User Agreements and ensure that no illegal activities are conducted by you or anyone with access to the account.
Reason 5: Wallet maintenance
As a centralized exchange that is known widely for its strong security, Coinbase has to keep its product in check at all times. There are developments and upgrades that need to be made to the Coinbase wallet. This wallet which holds cryptocurrencies may need time to be upgraded to improve its security or protect against a known vulnerability.
Ideally, wallet maintenance may take up to a couple of hours. This is, however, mentioned before on the website so that users can plan their trades accordingly. During wallet maintenance, there deposits or withdrawals may be unavailable to ensure that funds are not lost. Users will also need to take into account the exact time that the wallet maintenance may take place. This is because a withdrawal request that was placed at the same time as the start of the maintenance may also get rejected.
Solution. Lookout for any messages or announcements on the Coinbase Status page before planning their withdrawals. It may also be an excellent idea to follow several social media platforms that Coinbase has accounts on. The exchange usually adds any information regarding a potential wallet upgrade and related details on these platforms.
Reason 6: Incorrect wallet address
A study by Chainalysis stated that over 20% of Bitcoins are lost forever due to them being sent to the wrong or non-existing wallets. This is a common mistake that may happen to beginners or professional investors alike. If a particular blockchain network is selected that does not match the address mentioned, then Coinbase will prompt the user to make the correction. However, in case of a completely wrong wallet address, the funds will not get credited to the recipient's wallet or exchange account. In this case, it can be very difficult to recover lost crypto sent to the wrong address.
Solution. The best solution is to recheck the wallet address of the intended recipient. There may also be a memo requirement in some cryptocurrency withdrawals. Ensure that every detail provided is correct and try withdrawing. It is best to scan the QR code or copy it to the clipboard to avoid typing mistakes.
Reason 7: Blockchain network is busy
This is a common reason for Coinbase withdrawals getting rejected. A blockchain getting congested is usually caused due to an immense number of transactions being carried out on the respective network. For eg. the Ethereum network is one of the most popular and widely used networks in the crypto space. Sometimes, there may be a huge number of transactions on the platform which would not leave space for any new transactions to take place for a certain period.
Thus, it may be possible that while withdrawing funds, one may come across a congested network prompt. This is not desirable, since several users prefer specific networks while sending their crypto due to lesser fees or quicker transaction time. But a congested network will leave Coinbase with no choice but to reject the withdrawal.
Solution. An alternate option is to send the transaction over a different blockchain network. Although, if the user wishes to carry out the transaction through a specific network only, then it can be done; provided they wait for a short span of time or till the congestion clears up.
Reason 8: Trusted address book protection
There is a huge variety of features on the Coinbase exchange to personalize or make navigation easier. One of the many features available on the platform is Trusted Address Book Protection. In this, users are only allowed to withdraw funds to wallets that are already fed to the exchange. If this feature is turned on, then a Coinbase withdrawal request for a different destination may be rejected.
Solution. The solution to avoid this is to turn off the Trusted Address Book Protection feature or simply add the new recipient details and save it on the Address Book.
While Coinbase is a highly popular CEX, users may come across several issues while withdrawing funds, It is ideal to learn the major reasons that cause this act accordingly to conduct a smooth transaction.