Coinbase Irks Users After Licensing Analytics Software To US Secret Service As Privacy Concerns Grow
Coinbase which is one of the leading cryptocurrency exchanges has secured a 4-year deal with to lease its analytics platform to the US Secret Service and the Department t of Homeland Security.
Coinbase license analytics software to US Secret Service
The Secret Service has been using the exchange’s blockchain analytics software since May 11, 2020, with the contract expected to expire on May 10, 2024. According to USASpending.gov, the US directory for government deals, the agency paid $183,750 to use the Coinbase Analytics Platform for four years.
The announcement comes barely a month after Coinbase revealed that it had licensed the Analytics Software to the Drug Enforcement Administration and the Internal Revenue Service. The licensing of the Analytics Software to the government agencies received criticism from Coinbase users who indicated that the move jeopardized their privacy. This is because the government agencies will be able to access their on-chain activities. Some users urged others to delete it stating that the exchange was bad for crypto and Bitcoin.
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Coinbase CEO defends move to license analytics software to government
However, Brian Armstrong the CEO of Coinbase has defended the decision to license the platform to government agencies. He said that the analytics platform has been around for a long time and it is not something new. The software uses data that is publicly available to track cryptocurrency transactions that are associated with criminal activities.
Armstrong explained that Coinbase had been using existing analytics services out there that worked out well. However, the problem was the exchange doesn’t like data sharing with third parties and they also didn’t support chain or features Coinbase needed. As a result, they moved to bring the capability in house.
Further, Armstrong stated that the capabilities are expensive to build, and thus the exchange sought to recoup costs by selling the Analytics software. He added that currently there is a massive blockchain analytics software market and as a result, Coinbase will be selling to many folks. The licensing of the platform to government agencies is vital in creating relationships with authorities which is vital for growing the cryptocurrency space.
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