Privacy is Paradise

GM. We hope you have a 4th of July weekend for the ages. Ok maybe you don't have to go that crazy. Enjoy yourself and be safe. Freedom! We won't be publishing on the 4th but will be back at it on Tuesday!

How much does your privacy mean to you? Was the promise of privacy one of the reasons you joined the world of cryptocurrencies? How would you feel if your data were sold without your knowledge? Evidently, that’s what happening with Coinbase and ICE. Check out our in-depth look at how Coinbase is using your crypto against you.

Today's Topics:

• Coinbase is sharing your data whether you like it or not

• Two weekend Reads

• Quick Links

Coinbase Gives ICE Free Rein

“Privacy is not for sale and human rights should not be compromised out of fear or greed.” -Pavel Durov

Durov, the founder and owner of Telgram, the popular messaging app, tweeted these words to push back against the control that governments have over today’s tech behemoths. These words are truer than ever as The Intercept has discovered that Coinbase has given ICE the ability to track transactions on its platform through multiple cryptocurrencies.

If it makes you feel any better, the crypto titan isn’t giving ICE (Immigrations and Customs Enforcement) your data. No, they’re selling it to them. Coinbase is actively pawning your transaction information to a department of the United States government. Doesn’t that make you feel all warm and good?

Coinbase Tracer

Even better, they’re using it to track and identify cryptocurrency users through a software analytics tool Coinbase sold to ICE. How much is your data worth? According to Coinbase it’s worth a $29,000 license and $1.36 million software tool.

What can ICE access? According to documentation obtained by Tech Inquiry, ICE has unlimited access to Coinbase Tracer, the intelligence-gathering tool used by Coinbase. With its Tracer software, Coinbase can dig through the hundreds of thousands of transactions that take place each month on the blockchain.

Coinbase uses this tool to aid law enforcement and ensure corporate compliance. However, now ICE has access, so they too can “investigate illicit activities including money laundering and terrorist financing while connecting crypto addresses to real-world entities.” Basically, ICE can see and track anything you do while you use Coinbase.

Fool me once, shame on you

Surpised? You shouldn’t be. This isn’t the first time Coinbase and the US government have worked together. The exchange has actively sought out the DEA, IRS, and Secret Service, pitching the capabilities of its software. And it doesn’t help when your Vice President of Global Intelligence takes the show to Congress because they’re eager to help Homeland Security.

In addition to this type of questionable behavior, Coinbase Tracer was developed through controversial methods. The development team behind the software, Hacking Team, was itself caught multiple times doling out software to unsavory governments. Coinbase’s response? We’ll transition out these team members. 

We would insert our eyeroll emoji here but it’s pretty worn out.

The value of privacy

It’s clear by its actions that Coinbase values assisting the US government more than it does the privacy of its user’s data. In a time when users are quick to give up their right to privacy on social media, it has to raise some eyebrows that the crypto platform would actively look to sell information to the government.

The tell-tale sign that Coinbase is behaving unethically is in its unwillingness to fully answer the question about what ICE has access to. “Coinbase Trace…does not make use of Coinbase user data.” You’ll notice there’s no mention of ICE, its limitations, or what it’s allowed to do with the information it gathers.

Crypto isn’t inherently private, but a certain level of anonymity is expected. Is it too much to ask nowadays that a platform not actively sell user information?

It would appear so.

Two weekend Reads

Utility Tokens From Real Businesses Will Drive Next Wave of Crypto Adoption - By Tasha Labs

Toys, Secrets, and Cycles: Lessons from the 2000s - By Chris Dixon partner at a16z

Quick Headlines

Napster 3.0 - Remember downloading music through Napster? Even if you don’t, you can get it on the streaming platform with it’s $NAPSTER NFT token. 

Inflation and Bitcoin - Want to learn more about how digital gold and printed money impact one another? Check out this in-depth guide by Daniel Kuhn.

Summer meltdown - Is the worst of the crypto winter behind us? Pantera Capital CEO Dan Morehead seems to think so.

Jobs:

What crypto winter? - If you’re looking for a job in crypto, there are plenty of companies hiring.

Hacks:

Piracy on the OpenSea - Popular NFT platform OpenSea suffered a data breach when an external party leaked user information.

Not so regal - “Cryptoqueen” Ruja Ignatova was placed on the FBI’s Ten Most Wanted Fugitives list with a $100,000 reward for information.

Hilarious Twitter account to follow if you like tech or crypto. @shitPM

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Disclosure: We are a newsletter for information only. We are not financial advisors nor do we claim to be. Consult your legal, investment or tax advisor. Crypto is risky. Do you own research.