Coinbase, the largest cryptocurrency exchange in the United States, has denied allegations that the company was selling customer transaction data to the US Immigration and Customs Enforcement (ICE). The ICE is an agency that works with the Department of Homeland Security.
Coinbase denies selling data to ICE
On June 30, reports of Coinbase’s selling geolocation data to the ICE started circulating. This news spooked some exchange users who complained that they did not sign up to have their data shared with a government agency. Some users even threatened to sue the exchange for this invasion of privacy.
Coinbase posted a statement on Twitter saying that the allegations of the company selling private user data were false. According to the exchange, its priority was guaranteeing user safety and ensuring all transactions were secured.
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“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,” the exchange said.
The platform further explained how the Coinbase Tracer tool is used. It said that this tool was used to comply with government regulations, adding that it could be used to investigate crimes such as money laundering and terrorism financing. It also said that the information shared with the government did not come from the Coinbase user data but from public sources.
In September last year, Coinbase secured a deal with the ICE to develop software that could be used by the agency. This deal requires that the exchange provides “application development software as a service” to the ICE to receive $1.36 million in return.
Coinbase faces other setbacks
Coinbase announced that it was laying off 18% of its staff. The exchange’s decision to lay off employees and close open positions was caused by the ongoing bear market. Moreover, Coinbase stocks have also plunged since the company reported a net loss of $430M in Q1 2022.
Last week, Moody’s rating agency downgraded Coinbase’s Corporate Family Rating (CFR). This downgrade has changed the opinion on how Coinbase can repay its financial obligations.
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