66% of Coinbase users willing to leave the exchange after mounting privacy concerns. 66% of Coinbase’s users are willing to leave the platform following reports that the U.S. crypto exchange plans to sell user data to two government agencies for $250,000.
Reports emerged on the weekend alleging that the Drug Enforcement Agency (DEA) and the Internal Revenue Service (IRS) had intended to buy licenses from Coinbase Analytics, an analytic unit of the crypto exchange.
In one of the documents published in April, the IRS points out the relationship between Coinbase Analytics and Neutrino. Neutrino is a blockchain surveillance platform controversially acquired by Coinbase in 2019. It says the subsidiary “allows for the analysis and tracking of cryptocurrency flows across multiple blockchains that criminals are currently using.”
The IRS added “Coinbase Analytics also provides some enhanced law enforcement sensitive capabilities that are not currently found in other tools on the market. This action will result in a Firm Fix Priced purchase order, Period of Performance: One base year from date of award with one 12-month option.”
On the other hand, the DEA document observes that Coinbase Analytics (CA) “provides investigators with identity attribution and de-anonymities virtual currency addresses domestically and internationally.”
It said that “CA is known for its accuracy of attribution, which includes some of the most conservative heuristics used in commercial blockchain tracing tools. This is critical in avoiding false-positive during target identification.”
Coinbase has denied selling personal user data. A company official argued that “all data in our analytics tool is fully sourced from publicly available data, and does not include any personally identifiable information.”
Cryptocurrency trader and analyst Josh Rager took to Twitter to ask his 73,000 followers if they would delete or cease using their Coinbase account. Over 5,000 people responded to the poll in which 66% said they would opt out of the regulated exchange. The remaining 33% expressed a willingness to stay.