After a judge has ruled that customer's assets do not belong to them based on the bankrupt-firm's Terms of Service (ToS), I decided to check how deep we could go were one of the exchanges in the title to fail. I was looking specifically for insurance and/or ownership of the assets. See the TL;DR at the end.
Binance
Binance's ToS have no mention of “ownership” or “insurance”. When trying to search the page for these, nothing relevant comes out. Some things, though, got my attention:
https://preview.redd.it/ss7asen0ugaa1.png?width=1232&format=png&auto=webp&s=ad7362dac89410f81d9a100604117d9913a1c94e
They claim not to have any obligation towards us when we're using their services. In addition, no communication shall be implied as Financial Advice, not even the spam emails they send you encouraging you to use leverage [sic] because you could “gain 10x your investment”.
Other point that caught my eyes was:
https://preview.redd.it/ig0876qltgaa1.png?width=1253&format=png&auto=webp&s=e8738c3c5df67ac4c528f4293af9505040ce3bf0
I mean, why would they not warrant that their services are accurate and reliable?
Kraken
When it comes to ownership, they're very clear: the assets are yours! The word Payward refers to Kraken themselves:
https://preview.redd.it/mnlu6yxjugaa1.png?width=666&format=png&auto=webp&s=fd51bab7596cab70a15c76ff923ac22eb0e90949
However, the assets are not insured or covered for losses:
https://preview.redd.it/jtddss8vugaa1.png?width=690&format=png&auto=webp&s=5c15f0d3df3e336a421d7053043b8172aef4352b
A question I have here: does this mean that if the exchange goes bankrupt by e.g. a hack, a judge and/or lawyers could claim that the losses are not Kraken's fault, and therefore you'd be left without your assets?
Kraken also takes no responsibility for losses in the following cases:
https://preview.redd.it/n4l0g4xcvgaa1.png?width=704&format=png&auto=webp&s=5cdf5637f0bc56b94a20aab9e594da524e2af2b0
Coinbase
Ownership belongs to the users:
https://preview.redd.it/rgqtv2qawgaa1.png?width=927&format=png&auto=webp&s=35e0ba51675f5bbf806695c73633c2a95831de05
Contrary to Binance and Kraken, user assets are insured by up to $250,000, as long as they're in USD (cash) format within your wallet:
https://preview.redd.it/n16qj73jvgaa1.png?width=935&format=png&auto=webp&s=f0fd5840e9a69070c53453ad0458d69dbbcfe397
Funnily enough, one of the insurers is no one else than JPMorgan Chase:
https://preview.redd.it/vnu779nrvgaa1.png?width=1428&format=png&auto=webp&s=89097fd1c8d22ae3b0148ee2e156217b7c7eef86
A portion of your assets are insured against theft (at Coinbase's end, not yours) and such:
https://preview.redd.it/9i7ul4mxvgaa1.png?width=1422&format=png&auto=webp&s=8f680fa518be3b23c72418c21ecb78c68e81b5fb
I could not find information on what's the % of this portion.
They're launching Coinbase One, where you pay a subscription to a VIP-like access to benefits, which accounts for an insurance of up to $1M US dollars on the assets on your wallets:
https://preview.redd.it/qp8vjtk8wgaa1.png?width=938&format=png&auto=webp&s=bea5709772a4743065f97408c22f8de8db141c92
TL;DR
- Kraken and Coinbase acknowledge that assets belong to users
- Binance does not say anything on ownership (at least not that I could find)
- I only found insurance information on Coinbase: all balance held in USD (fiat) is insured by default and up to $250,000, or up to $1M dollars for assets in fiat and crypto for Coinbase One users
I was not expecting to see any kind of insurance at all, and am surprised with Coinbase's take on that. Binance was the one with the less amount of information on these topics (at least per my research).
I'm not sure to what extent the assets would still be considered users' property in the case of a bankruptcy filing, though. Exchanges can change their ToS at anytime, so avoid leaving funds there for longer.