Coinbase Offering Chain Analytics Tech to FED

Coinbase is offering its ‘Coinbase Analytics’ chain analysis tech to federal agencies in USA. These agencies include the DEA (Drug Enforcement Administration) and the IRS (Internal Revenue Service).

According to a document submitted by the IRS Office of Information Technology Acquisitions (OITA), the IRS is looking for software that can assist in tracing various cryptocurrencies for law enforcement purposes. In the document, the IRS OITA mentions the utilization of Neutrino, an intelligence agency that Coinbase purchased in February 2019.

Coinbase’s purchase of Neutrino was met with fierce controversy and eventually lead to a #DeleteCoinbase movement. This is not only because of Coinbase’s announcement that Neutrino tech “will help [Coinbase] identify bad actors”, but also because Neutrino was involved with an Italian software provider called Hacking Team whose spyware was involved with various privacy and human rights abuses. Following the backlash, Coinbase ensured that Neutrino parted ways with any individuals and programs associated with Hacking Team.

Coinbase has also come under fire for promoting the invasive Ethereum Name Service, and for often being unavailable during massive price jumps. The sale of their Chain Analytics tech is just another addition to the growing list of Coinbase’s controversial choices.

What is Chain Analytics?

The publicity of a blockchain is a feature of the technology, but this feature can also be abused. On one hand, a publicly visible ledger is essential for securing the blockchain and refusing false information. On the other hand, the nature of a blockchain allows you to trace transactions all the way back to the point of purchase. Chain Analytics also know as Blockchain Analytics is a broad term for collecting data on blockchain activity. Chain Analytics can be used to group different wallet addresses that belong to one individual together. Since many crypto on-ramps require identification, exchanges such as Coinbase can use this grouping to associate many addresses with one verified identity.

Understandably, this is very upsetting for people that believe in complete privacy. Not only does a private company have this information, but they are selling the tech to the federal government. That said, it is inevitable that governments will leverage the publicity of the blockchain for law enforcement purposes. It is no surprise that the government is reaching out to crypto companies like Coinbase for help with this. Cash will remain King when it comes to complete privacy.

Click here to learn more about privacy in the cryptosphere.

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