8 Reasons Your Coinbase Withdrawal Is Rejected (With Solutions)

Withdrawing money from Coinbase can be rejected or postponed due to several reasons. While some may be caused by the user's negligence, others may be due to unforeseen situations. The most common reason is due to the blockchain network being busy, trying to withdraw above or below the limit, and attempting to send crypto to an incorrect wallet address.

Explanation of Why Coinbase Withdrawals Can Fail

Reason 1: Coinbase ID verification is pending

One of the most important factors that any investor considers while investing in a platform is its security. Naturally, it remains evident that a huge number of platforms fail at this. Fortunately, Coinbase is one of the most secure exchanges in the world and constantly takes care of every measure required to maintain its reputation. For the same reason, KYC or Know Your Customer is an important part of registration.

Know Your Customer is a simple verification process that requires users to provide their identification details as mentioned on the website. KYC helps Coinbase protect itself and its investors from any fraudulent activities, like money laundering. Since the cryptocurrency domain has been criticized for being a medium for illicit activities several times, a KYC is required to be able to withdraw assets from the platform.

Reason 2: Withdrawing funds below the minimum amount

As with every other standard exchange, there is a minimum withdrawal amount on Coinbase too. This applies to cashing out or simply transferring cryptocurrencies from one place to another. There is an option on the platform to withdraw directly to the bank account or one’s debit card. While the minimum withdrawal of money may change occasionally, there is a fixed requirement for withdrawals in crypto. Coinbase does not allow the user to even go through with the withdrawal process at all if the amount mentioned is low.

Reason 3: Withdrawals above the daily limit

If there are no maximum withdrawal limits, an exchange like Coinbase may need to face several risks. Undoubtedly, this also means that users are exposed to any issues that may be caused by hefty withdrawals by single investors or entities using the platform.

To maintain a healthy flow of liquidity while minimizing the risk of any illegal activities, Coinbase has a pre-determined maximum withdrawal amount. Currently, this amount is set at $50,000 per day. It covers not only the withdrawals of funds to the bank but also the transfers between cryptocurrencies from one place to another. For example, this limit applies when withdrawing from Coinbase to Binance.

In short, if a user is looking to send BTC to another exchange or wallet, then they would only be able to make a transaction of BTC worth $50,000 or below. While deposits are unlimited, withdrawal limits are set across all products by Coinbase. However, one can go to the limits page of the platform and apply to be considered for higher limits.

Reason 4: Violation of Coinbase Policies

This is an extremely vital factor in accessing or withdrawing funds. Every user is expected to adhere to a regulatory framework on Coinbase. These policies are generally created in accordance with the government policies of the respective countries the user belongs to. These policies are mentioned on the Coinbase website and have to be accepted by the user before signing up for the exchange.

A violation of these policies previously agreed upon by the user can result in the individual getting banned from Coinbase. The ban simply implies trading on the platform. Thus, a person is free to withdraw their funds into another wallet. However, in rare cases where the law dictates a need for an account to be frozen, Coinbase has the authority to make that happen. In short, if policies are violated in an attempt to conduct illegal activities, then withdrawals may be stopped immediately.

Reason 5: Wallet maintenance

As a centralized exchange known for its strong security, Coinbase must always keep its product in check. The Coinbase wallet, which holds cryptocurrencies, needs development and upgrades. It may need time to be upgraded to improve its security or protect against a known vulnerability.

Ideally, wallet maintenance may take up to a couple of hours. However, this is mentioned on the website so that users can plan their trades accordingly. During wallet maintenance, deposits or withdrawals may be unavailable to ensure that funds are not lost. Users will also need to take into account the exact time that the wallet maintenance may take place. This is because a withdrawal request that was placed at the same time as the start of the maintenance may also get rejected.

Reason 6: Incorrect wallet address

A study by Chainalysis stated that over 20% of Bitcoins are lost forever due to them being sent to the wrong or non-existing wallets. This is a common mistake that may happen to beginners or professional investors alike. If a particular blockchain network that does not match the address mentioned is selected, Coinbase will prompt the user to make the correction. However, the funds will not get credited to the recipient's wallet or exchange account in case of a completely wrong wallet address. In this case, it can be very difficult to recover lost crypto sent to the wrong address.

Reason 7: Blockchain network is busy

This is a common reason for Coinbase withdrawals getting rejected. A blockchain getting congested is usually caused due to an immense number of transactions being carried out on the respective network. For example, the Bitcoin network is one of the most popular and widely used networks in the crypto space. Sometimes, there may be a huge number of transactions on the platform which would not leave space for any new transactions to take place for a certain period. This is a common reason for Bitcoin transactions to become stuck and unconfirmed until the network traffic is cleared.

Thus, it may be possible to encounter a congested network prompt while withdrawing funds. This is not desirable since several users prefer specific networks while sending their crypto due to lesser fees or quicker transaction times. However, a congested network will leave Coinbase with no choice but to reject the withdrawal.

Reason 8: Trusted address book protection

There is a huge variety of features on the Coinbase exchange to personalize or make navigation easier. One of the many features available on the platform is Trusted Address Book Protection. In this, users are only allowed to withdraw funds to wallets that are already fed to the exchange. If this feature is turned on, then a Coinbase withdrawal request for a different destination may be rejected.