Coinbase, the second-largest crypto exchange globally, has launched a new tool to help its customers recover more than 4,000 unsupported ERC-20 tokens sent to its ledger, the company exclusively told TechCrunch.
“ERC-20 token” is technical terminology for any cryptocurrency created using the Ethereum blockchain. While Coinbase supports hundreds of cryptocurrencies, there are thousands that it doesn’t. The ERC-20 self-service asset recovery tool allows customers to recover different kinds of tokens sent to a Coinbase address.
“It’s been a pain point for customers who sent ERC-20 tokens to a Coinbase receive address,” Will Robinson, vice president of engineering at Coinbase, told TechCrunch. “When people accidentally sent these assets, they were effectively stuck up until this point.”
In the past, if you sent assets not supported by Coinbase to a users’ address on the exchange, you’d get a message saying the assets were successfully delivered on-chain, but they didn’t actually go to the receiver’s wallets. Usually, these assets are unrecoverable because internal operators don’t have access to the private keys needed to reverse transactions.
Image Credits: Coinbase (opens in a new window)
Such transactions make up a “small fraction of the total transfers” Coinbase receives, but from an individual user’s point of view, such an error could make for a “very bad day,” Robinson said. Coinbase has over 108 million verified users across over 100 countries with $101 billion assets on the platform, according to its website.
Many tokens that are ERC-20 tokens on the Ethereum mainnet that have pricing information on a decentralized exchange or other venue can be recovered, Robinson said. “We make no quality representation of these assets, as they haven’t gone through our review process, but we’re facilitating the returns that accidentally sent it in the first place.”
To recover funds, customers must provide their Ethereum transaction identification for the lost assets and the contract address of the lost asset. The recovery tool only works for select ERC-20 tokens sent into Coinbase. “For supported assets, there’s nothing to be done here,” Robinson said. “The problem doesn’t exist in the same way, because Coinbase users have access and can send them back themselves.”
The feature will be rolled out over the next few weeks, but is not available for Japan or Coinbase Prime users. There’s no recovery fee for amounts less than $100, but those worth over $100 will be charged a 5% fee – aside from the separate network fee, which applies to all recoveries, Coinbase said.
In the long term, support for other asset recoveries beyond ERC-20 tokens could be a reality, but “no firm commitments” exist today, Robinson said. “This is a direction we know is important to users and want to drive forward.”
toptechtrends.com/2022/12/15/coinbase-asset-recovery-tool/”>Coinbase launches asset recovery tool for unsupported Ethereum-based tokens by toptechtrends.com/author/jacquelyn-melinek/”>Jacquelyn Melinek originally published on toptechtrends.com/”>TechCrunch
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