Coinbase, the second-largest crypto exchange in the world, has launched a new tool to help its customers recover more than 4,000 unsupported ERC-20 tokens sent to its ledger, the company told ExamPaper exclusively. .
“ERC-20 token” is technical terminology for any cryptocurrency created using the Ethereum blockchain. While Coinbase supports hundreds of cryptocurrencies, there are thousands that do not. The ERC-20 self-service asset recovery tool allows customers to recover various types of tokens sent to a Coinbase address.
“It was a pain point for customers sending ERC-20 tokens to a Coinbase receiving address,” Will Robinson, vice president of engineering at Coinbase, told ExamPaper. “When people accidentally sent these assets, they were effectively stuck until now.”
In the past, if you sent assets not backed by Coinbase to a user’s address on the exchange, you got a message that the assets were successfully delivered on-chain, but they didn’t actually go to the recipients’ wallets . Most of the time, these assets are irrecoverable because internal operators cannot access the private keys needed to reverse transactions.
Such transactions make up a “small fraction of the total transfers” Coinbase receives, but from an individual user’s point of view, such a mistake could make for a “very bad day,” Robinson said. According to the website, Coinbase has over 108 million verified users in over 100 countries with $101 billion in assets on the platform.
Many tokens that are ERC-20 tokens on the Ethereum mainnet and have price information on a decentralized exchange or other location can be recovered, Robinson said. “We do not provide a quality representation of these assets because they have not gone through our review process, but we facilitate the returns that have been sent by mistake.”
To recover funds, clients must provide their Ethereum transaction ID for the lost asset and the contract address of the lost asset. The recovery tool only works for selected ERC-20 tokens that have been sent go inside Coin base. “For supported resources, there’s nothing to do here,” Robinson said. “The problem does not exist in the same way, because Coinbase users can access and return them themselves.”
The feature will roll out in the coming weeks, but it will not be available to users in Japan or Coinbase Prime. There is no recovery fee for amounts under $100, but amounts over $100 will incur a 5% fee — aside from separate network fees, which apply to all recoveries, Coinbase said.
In the long run, support for asset recovery other than ERC-20 tokens could be a reality, but there are no firm commitments today, Robinson said. “This is a direction we know is important to users and we want to continue.”