Disgruntled cryptocurrency users are lobbying to boycott Coinbase, which inked a crucial deal with the United States Homeland Security to provide the Immigrations and Customs Enforcement branch with blockchain analytics software.
Earlier, the US Securities and Exchange Commission sent shockwaves threatening to sue the Brain Armstrong-led crypto exchange over its high-interest ‘Lend’ offerings. The crypto community came out in support of the exchange, with many drawing parallels to the blockchain firm Ripple’s ongoing legal battle. However, #deletecoinbase soon began to trend following what is being perceived as the platform’s largest deal ever with the Feds by signing a $1.36 million contract to offer ICE financial surveillance software.
According to reports, Homeland Security has offered the contract mentioned above to the exchange citing “business application” and “application development software.”
Coinbase’s controversial acquisition and other mishaps
Coinbase has a long history of collaboration with the United States government. And this isn’t the first controversy related to surveillance that the exchange giant has found itself embroiled in. In fact, among a series of perceived mishaps by Coinbase was the infamous Neutrino acquisition back in 2019 for $13.5 million.
A few team members of Neutrino were linked to the infamous Italian organization called Hacking Team, which sold spyware to countries like Saudi Arabia, Sudan, and Venezuela. Even as Armstrong admitted that the acquisition was a mistake, the damage was already done. Jesse Powell, who happens to be the CEO of the rival exchange Kraken, also pointed out and called the acquisition “bizarre.”
Among other such deals, the US Secret Service stands out to license its Coinbase Analytics tools. Under this, the law enforcement agency may use the crypto platform’s blockchain forensics tool last until May 2024.
What’s privacy?
It is important to note that many in the cryptocurrency community already hate blockchain surveillance companies. By the latest actions, it appears that the US government has moved over platforms such as Chainalysis and other such firms.
Time and again, privacy advocates have argued that these entities are laying the groundwork for additional forms of mass surveillance. Despite a huge uproar, these companies that offer services to track, gather and analyze cryptocurrency payments on the blockchain are growing fast—naturally, Coinbase’s latest move to help the government to do the same faced hostile reception.
Alex Gladstein, the CSO at the Human Rights Foundation and one of the most vocal critics of blockchain analytics firms, stated,
“Like, this isn’t very much money for Coinbase in the grand scheme of things. Strange that they would risk so much reputationally for such a relatively small sum.”