Electronic Frontier Foundation Asks Coinbase to Submit Transparency Reports

The Electronic Frontier Foundation (EFF) has asked Coinbase to endeavour to release their transparency report on a regular basis, to enable members of the public to have a clearer picture of how often it receives requests for information from governments and how it handles those requests, according to a blog post on September 2, 2020.

The Need for Regular Transparency Reports 

At a time when cryptocurrencies and the underlying distributed ledger technology (DLT) is increasingly attracting the attention of the masses as well as authorities around the globe, the Electronic Frontier Foundation has made it clear that it has now become very important for crypto market participants to release their transparency reports on a regular basis.

In its September 2, 2020, blog post, the EFF, a San Francisco-based privacy-centric non-profit digital rights group, stated categorically that it has now become crucial more than ever for users of payment processors and crypto exchanges, as well as the general public to know how often authorities request for their personal data from these platforms and how the firms respond to these requests.

The EFF further noted that people’s financial data is one of the most sensitive information about them, as it reveals key details such as their daily habits, the things they care about, the places they go and who they hang out with, to whoever cares to know. 

Coinbase Must Take the Lead 

Against that backdrop, the foundation has called on Coinbase, which is one of the largest crypto exchanges in the U.S., to lead by example by releasing regular transparency reports detailing how many government requests for information it receives, and how it deals with them.

The EFF wrote:

“As one of the largest individual companies in the U.S. cryptocurrency market, Coinbase wields tremendous power and influence over this dynamic. It should stand up for its users and also use its market power and influence to show others that transparency reports are an industry standard for all crypto exchanges.”

To make its point clearer, the EFF cited the case between the U.S. government and one Richard Gratkowski, whose transaction data was handed over to the authorities by Coinbase, when the latter received a subpoena from the government mandating it to release the details of any of its customers who had sent crypto payments to a certain child pornography site.

The EFF says it is part of the exchange’s customer privacy protection obligations to shine more light on the surveillance activities of the government and it should have simply released a transparency report when it shared Gratkowski’s data with the government.

The EFF has urged Coinbase to follow in the steps of Kraken, another top U.S.-based exchange that releases transparency reports every year. 

“At least one of Coinbase’s competitors, Kraken, has already recognized the importance of being open on this topic, and publicly released info on global law enforcement requests it receives. Providing this accountability is particularly important when it comes to financial data, as they can often be turned over with a subpoena, a 314(a) request, or a National Security Letter,” concluded the EFF.