Cryptocurrency exchange Coinbase accused of selling personal data of users to the US government

Cryptocurrency exchange Coinbase has denied allegations that it sold personal data of its users to the US government, emphasizing that it provides information solely for the investigation of financial crimes.

On its official Twitter page, Coinbase stated that its priority is to provide safe and secure access to the exchange: «We want to be clear: Coinbase does not sell personal data. Our first priority has always been and will always be the security of the cryptocurrency platform.»

1/ We want to make this incredibly clear: Coinbase does not sell proprietary customer data. Our first concern has been and always will be providing the safest and most secure crypto experience to our users.

— Coinbase 🛡️ (@coinbase) June 30, 2022

The day before, the media reported that Coinbase was sharing its customers' geolocation and transaction histories with the U.S. Immigration and Customs Enforcement (ICE). According to the Tech Inquiry research group, in August 2021, Coinbase sold ICE a license to use analytical software. A month later, the exchange signed an agreement with the government to transfer the software worth more than $ 1 million. As a result, the US authorities gained access to various functions of the Coinbase Tracer user data tracking platform.

However, representatives of the exchange emphasized that its Coinbase Tracer application was developed in accordance with government requirements and provides information only for the investigation of crimes such as terrorist financing and money laundering. Coinbase emphasized that the data they provide to the government is also available in public sources, so it is not a disclosure of personal information of customers.

Obviously, most users are now concerned — no one wants their personal data to be obtained by a third party. However, it is not known what is better — confidential information in the hands of the government or a stolen database from hackers. Thus, the trading platform for the sale of non-fungible tokens OpenSea announced the theft of users' personal data — all through the email partner of the Customer. io platform. An employee of the service illegally used his own access to users' email addresses to create and send automated emails. He was downloading all email addresses to his database and transferring them to a third party.

Given the recent events surrounding Coinbase, it is obvious that the crypto exchange is going through a difficult time: a class action lawsuit for promoting the TerraUST stablecoin, a negative forecast for Coinbase’s profitability for the next 12 months, the dismissal of 1,100 employees, and the demand of employees for the resignation of management.