coinbase wallet

Encrypted Keys for Coinbase Wallet Can Now Be Backed Up on Cloud

According to an announcement on Coinbase’s official blog on February 12, 2019, Coinbase Wallet users will be able to back up their private keys on iCloud or Google Drive.

The official statement by Coinbase explains that users will be able to safeguard their private keys against loss by uploading their keys to the cloud. Hence, any inadvertent loss of funds will be avoided. The announcement reads as follows,

“The private keys generated and stored on your mobile device are the only way to access your funds on the blockchain. Owners of ‘user-controlled wallets’ like Coinbase Wallet sometimes lose their devices or fail to back up their 12-word recovery phrase in a safe place, thus losing their funds forever.”

Coinbase Wallet users will be able to store an encrypted copy of the recovery phrase on the cloud.

According to Coinbase, as the recovery phrase key will only be accessible through user known passwords, hence neither the cloud service provider nor Coinbase will have access to the funds of the users in any way.

The backup will be encrypted using the AES-256-CGM encryption. This backup will be accessible only through the Coinbase mobile app.

In the official announcement, Coinbase also stated that their Wallet will gradually add support for other clouds, apart from iCloud and Google Drive. It is to be noted that the feature can be opted in by the users if they wish and that it does not take the place of the original recovery option offered by Coinbase.

Such recovery options come in as welcome surprise for users who want enhanced protection for their private keys. On February 2, 2019, we had reported how crypto assets worth USD 145 million went missing after the death of the founder of the crypto exchange QuadrigaCX as he had the sole access to the keys of the cold wallets where funds were stored. On February 1, 2019, QuadrigaCX had filed the application for creditor protection, which is in compliance with the Companies’ Creditors Arrangement Act (CCAA)