Courtesy: https://www.coinbase.com/
- The exchange explained that it only provided authorities with information regarding a financial fraud case.
- Customer trust in Coinbase may dwindle further after recent events about the exchange.
Top US crypto exchange, Coinbase, has declared that news that the firm was selling its users’ data to the US immigration and customs enforcement agency (ICE) is not true. The ICE is one of the agencies under the US Homeland Security department.
On Thursday, a popular online crypto news outlet broke the news that Coinbase was selling user data to the ICE. They further added that transaction and geo-data history were part of the user data that Coinbase was selling.
Many Coinbase users on Twitter, including Solobase Mac, expressed their disappointment about the news. Solobase Mac threatened to institute legal action against Coinbase if the news was true.
Coinbase denies the allegations
However, the popular crypto exchange has come out to deny the news. Coinbase’s official Twitter account states that the company doesn’t its user’s data as it understand privacy rights. The exchange further restated its commitment to providing customers with a secure user environment and experience.
1/ 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.
— Coinbase (@coinbase) June 30, 2022
Coinbase also stated that its tracer tools are part of the requirements it must have to comply with directives from the authorities. According to the exchange, the tool tracks financial fraud cases like money laundering and terrorism financing.
Coinbase claims only to reveal publicly available information to the authorities, not private user data. Last September, Coinbase agreed with the ICE to develop a tracking app for the Homeland Security subsidiary. Part of the $1.36 million deal was for Coinbase to provide a software-as-a-service in application development for the ICE.
Coinbase focuses on expansion efforts
The general crypto market downturn hasn’t stopped Coinbase from expanding its operations into the European continent. The exchange already has an operating license from authorities in the United Kingdom, Germany, and Ireland. Recently, it started a hiring process in Switzerland, hinting that it might soon start operations there.
Nevertheless, Credit rating company, Moody, lowered Coinbase’s corporate family rating (CFR) last week. The CFR is Moody’s rating for companies that can meet up with their financial obligations.
The credit rating company also lowered Coinbase’s guaranteed senior unsecured notes. These notes are debts without backing from any collateral asset. Coinbase has been in hot waters recently following its decision to reduce its staff strength.
As reported earlier in the week, global investment banking giant, Goldman Sachs, also changed Coinbase’s rating from neutral to sell earlier in the week. Both Moody and Goldman Sachs gave similar reasons for changing Coinbase’s rating.
Read More: Goldman Sachs changes Coinbase’s rating from neutral to sell
Their reason was the macroeconomic challenges facing the crypto exchange. The decline in crypto trading volume, especially in the last two months, has caused a decline in Coinbase’s revenue.
The majority of the exchange’s revenue comes from trading fees. Hence, a decline in revenue means a poor performance of the company’s stock. Coinbase’s share price has dropped by 80 percent since the start of this year.
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