Crypto exchange Coinbase denied allegations of the company selling data of its customers to ICE in the United States. This is the Immigration and Customs Enforcement agency that falls under the jurisdiction of the Department of Homeland Security.
No data was shared with ICE
Rumors had been circulating the market on Thursday that Coinbase was providing ICE with geolocation data of its customers. Some of the exchange’s users were shocked at this news and noted that they had not agreed to this when they signed up on the platform. They called it an invasion of privacy and had many of them worried about where their data was going.
However, the crypto exchange clarified that it does not sell any proprietary customer data to anyone. As a matter of fact, Coinbase highlighted that its priority was to provide a secure and safe experience to its users. As far as its Coinbase Tracer tools are concerned, the company asserted that they were designed in compliance with the requirements of the US government.
According to Coinbase, the purpose of these tools is to investigate criminal activities related to finance, such as money laundering and terrorist financing. The exchange further added that the data they provide to the government is not the user data of the exchange, but is what they obtain from public sources.
Last year in September, the crypto exchange had agreed to a deal for software development with ICE. This deal involves the exchange developing software for the agency and providing it as a service for a cost of $1.36 million. A single analytics software license was also sold by the exchange to ICE for a price of $29,000. The full documents had come to light this week and had been obtained under the Freedom of Information Act.
Customers are outraged at Coinbase for this move and many have refused to believe that the crypto exchange does not sell data. This is particularly because of the use of the word ‘proprietary’ by Coinbase. The exchange said that it does not sell ‘proprietary’ data and people have focused on this statement, as they believe the exchange sells other data.
Trouble for Coinbase
This is not the only problem that Coinbase is currently facing. Last week, the company’s Corporate Family Rating (CFR) was downgraded by Moody. The credit rating company’s action resulted in Coinbase’s stock value plunging significantly. The guaranteed senior unsecured notes of the exchange were also downgraded, as this debt does not have any collateral assets.
Moreover, Coinbase has also had to freeze its hiring process and has cut down its workforce because of the crypto winter that has struck. However, it seems to be interested in expanding in Europe during this time. It has already begun hiring new staff in Switzerland and is also applying for a license in several European countries like Spain. It is currently licensed to operate in Germany, the United Kingdom and Ireland, but wants to grow and expand more in order to tap into the European market.