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Coinbase’s Plan to Sell Analytics Software to U.S. Government Could Backfire
Most cryptocurrency users would be willing to stop using Coinbase over the cryptocurrency exchange’s recent controversies, which include reports suggesting it plans to sell user data to two government agencies, and various outages.
According to a Twitter poll conducted by cryptocurrency trader and analyst John Rager, out of over 7,200 respondents 46.3% said they would be willing to “actually delete or stop using” their Coinbase accounts over these recent controversies, while only 23.3% said they wouldn’t be willing. The remaining 30% either voted to see results or didn’t use Coinbase.
Out of the respondents that answered either yes or no, 66% said they would be willing to stop using the cryptocurrency exchange.
Results from Delete/Stop Using Coinbase poll:
Out of the 5000 responses that answered either Yes or No:
66% said “Yes” – they would be willing to delete or stop their Coinbase account
33% said “No” – they would not stop using Coinbase
Interested to see the long term results
— Josh Rager 📈 (@Josh_Rager) June 6, 2020
The poll came amid several controversies Coinbase is embroiled in. As CryptoGlobe reported, Coinbase suffered outages when the price of bitcoin moved past the $10,000 mark earlier this month, as it “experienced a 5x traffic spike over 4 minutes.”
What likely got most users over the edge were public documents showing Coinbase is looking to sell a blockchain tool that provides law enforcement agencies with analytical capabilities, potentially deanonymizing users on the blockchain.
The documents show the Drug Enforcement Agency (DEA) and the Internal Revenue Service (IRS) plan to buy licenses from the exchange’s analytics unit, Coinbase Analytics, which allows for “the analysis and tracking of cryptocurrency flows across multiple blockchains that criminals are currently using.”
The IRS points to Coinbase Analytics’ relationship with Neutrino, a controversial surveillance platform Coinbase acquired last year. The IRS adds:
Coinbase Analytics also provides some enhanced law enforcement sensitive capabilities that are not currently found in other tools on the market.
The DEA, on the other hand, touts Coinbase Analytics providers investigators “with identity attribution and de-anonymities virtual currency addresses domestically and internationally.” Per the DEA Coinbase’s analytics arm is “known for its accuracy of attribution, which could help avoid “false-positives during target identification.”
Coinbase denies it’s selling users’ data, with one of the company’s officials saying all the data from its analytics tool is “fully sourced from publicly available data, and does not include any personally identifiable information.”
Responding to John Rager’s poll, some users didn’t just point to Coinbase’s outages and plans to sell analytics software, but also to its fees, user interface, and more.
Featured image via Austin Distel on Unsplash.