66% of Coinbase users are willing to leave the exchange due to growing privacy concerns

Two-thirds of people using Coinbase are willing to leave the platform following reports that the US exchange plans to sell user data to two government agencies for $ 250,000.

Cryptocurrency trader and analyst John Rager performed a poll on Twitter, asking his 73,000 followers: “Would you delete or stop using your Coinbase account?”

Over 5,000 people responded, and 66% said they would give up on the regulated exchange, one of the largest in the world. The remaining 33% expressed their willingness to stay. The platform contains thousands of users’ personal information drawn from strict know-your-customer requirements, in accordance with US policies.

Coinbase is in the eye of the storm after reports emerged over the weekend that the cryptocurrency exchange is selling a blockchain tool that provides law enforcement with superior analytical capabilities.

The Drug Enforcement Agency (DEA) and the Internal Revenue Service (IRS) intend to purchase licenses from the exchange’s analytics unit called Coinbase Analytics, based on documents available for public review.

In one of the documents published in April, the IRS highlights the relationship between Coinbase Analytics and Neutrino, a controversial blockchain surveillance platform acquired by Coinbase in 2019. It claims the subsidiary “allows the analysis and monitoring of cryptocurrency flows across multiple blockchain that criminals are currently using. “

The IRS added, “Coinbase Analytics also provides some advanced functionality for law enforcement that are not currently found in other tools on the market. This action will result in a buy order with a fixed fixed price, performance period: one base year from the award date with an option of 12 months “.

On the other hand, the DEA document notes that Coinbase Analytics (CA) “provides investigators with the identity attribution and de-anonymization of virtual currency addresses nationally and internationally.”

He said “CA is known for its attribution accuracy, which includes some of the more conservative heuristics used in commercial blockchain tracking tools. This is critical to avoid false positives when targeting.”

Coinbase denies selling personal user data. A company official supported that “all data in our analytics tool comes entirely from publicly available data and does not include personally identifiable information.”

But frequent outages during times of bitcoin hyperactivity, high transaction fees, and other privacy concerns have put thousands of Coinbase users in trouble. The exchange also previously shared data from 14,000 customers who traded cryptocurrencies worth $ 20,000 or more with the IRS, much to the chagrin of investors. Privacy is a fundamental principle of the Bitcoin movement, almost untouchable.

In John Rager’s survey, some investors showed that they were disappointed with Coinbase’s “dream”.

“Honestly, I don’t think there’s a good reason to use it anymore, outside of name recognition. There are many better platforms for onboarding. And better options for trading, “@_realPaulRyan said.

A @Flat railed: “I’m in 66% and quit (using Coinbase) 3 years ago. The rates are an absolute rip off. Always down when the price moves. Absolute joke. Why the hell would anyone use them is beyond me. “

Separately, Rager suggested that “millions of dollars seem to be leaving Coinbase as we speak. Investors and traders are no longer limited to Coinbase or Bitmex. If you ruin customers, engage in shady deals, or don’t improve a product, customers can now go elsewhere. to trade / invest “.

What do you think of Coinbase’s agreements with the IRS and DEA? Let us know in the comments section below.

Image credits: Shutterstock, Pixabay, Wiki Commons, Coinbase