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The Coinbase recovery tool will be available in the coming weeks for all customers except those in Japan.
Cryptocurrency company Coinbase (NASDAQ: COIN) has announced a recovery tool that customers can use to retrieve their lost ERC-20 tokens. This new feature allows Coinbase users to repossess over 4,000 unsupported ERC-20 tokens sent to its ledger. The ERC-20 token is the term used for cryptocurrencies created on the Ethereum blockchain. Coinbase explained that the ERC-20 self-service recovery tool would enable users to get back specific tokens sent to Coinbase addresses.
Asset loss is common in the crypto industry. Many retail and institutional investors have lost their crypto assets by sending them to the wrong addresses. It is good news indeed that Coinbase is unveiling a recovery tool to provide a solution to lost ERC-20 tokens. The company’s vice president of engineering, Will Robinson, told TechCrunch, “it’s been a pain point for customers who sent ERC-20 tokens to a Coinbase receive address.” He also mentioned how people lose total access to their assets when they mistakenly send them to the wrong address.
Coinbase Announces ERC-20 Tokens Recovery Tool
The Coinbase recovery tool will be available in the coming weeks for all customers except those in Japan. Also, users of Coinbase Prime will not have access to the new feature. Coinbase will charge a 5% recovery fee for tokens worth over $100. This fee is separate from the general network fee for all recoveries. To use the recovery tool, Coinbase costumes must provide their Ethereum transaction identification for the lost assets and their contact address.
Regarding Coinbase offering a recovery tool to other tokens beyond ERC-20, Robinson said such an option could be available in the future. He added, “there is a direction we know is important to users and want to drive forward.”
Before the unveiling of the recovery feature for ERC-20 tokens, assets not supported by Coinbase and sent to the exchange did not get to the receivers’ wallets. Even though the sender would get a message that the assets were successfully delivered on-chain, they get lost. Also, they were unrecoverable as internal operators had no access to the private keys required for reversal.
Robinson explained that these mistaken transactions make up a “small fraction of the total transfers” Coinbase receives. With over 108 million verified users across 100 countries and $101 billion in assets on the exchange platform, such an error could significantly affect users. In addition, the executive noted that many ERC-20 tokens on the Ethereum mainnet with pricing information on decentralized exchanges or other platforms can be recovered.
“We have 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,” explained he.