The Electronic Frontier Foundation (EFF) attacks Coinbase because of a lack of transparency. At the same time, the group pointed to exchange and Coinbase rival Kraken as an example of responsible behavior. The EFF was founded in 1990 with the aim of promoting civil liberties on the Internet. In today’s post, The EFF said there were growing concerns that payment processors will be forced to share their users’ information with authorities. There are no mechanisms available to the public to consider such requests:
“For this reason, we condemn Coinbase, one of the largest cryptocurrency exchanges in the country, to regularly publish transparency reports that contain information about the number of requests for information received from the government and how they have been handled.”
You realize that financial data is one of the most private personal pieces of information. They say how the exchange decides to meet government demands for that data can have a profound impact on their users. Note that users of cryptocurrencies attach particular importance to data protection:
“In particular, crypto exchanges need to understand the importance of protecting this information as their users value both the anonymity of cash and cryptocurrencies and their inherent resistance to censorship.”
The article also referred to Coinbase’s competitor, Kraken as an example of responsible behavior:
“At least one of Coinbase’s competitors, Kraken, has already recognized the importance of being transparent on this issue and has done so.” problematic public information on inquiries it receives from authorities worldwide. “
The post also mentions that The courts apply the so-called “third party doctrine”. enable authorities to obtain a person’s financial records from intermediaries such as cryptocurrency exchanges without the need for a court order. The assumption is that someone expects to lose some of their privacy if they choose to store data with a third party. This was the case in United States v. Gratowski, on the United States Court of Appeals for the Fifth Circuit, which also concerned Coinbase.
The EFF urged Coinbase to use its power and reputation in the crypto industry to defend its users and set an example for other exchanges.