Reportedly, the exchange was said to have signed a contract alongside the United States Secret Service worth $183,750 to help the agency with its blockchain analytics software for four years.
However, Armstrong, in his clarification via a Twitter post, claims the firm’s involvement with the U.S. government is to aid crypto growth and adoption. The CEO explained that the software was necessary for centralized exchanges whose platforms are connected to traditional banks.
These exchanges hence have to abide by Anti-money laundering policies that mandate exchanges to adopt the use of analytics software for tracking and monitoring customer transactions. Armstrong, in his clarification, also Concours that Anti Money Laundry (AML) policies were extreme; however, it is the only legal way to operate in the U.S.
Coinbase Analytics, Neutrino 2019
Coinbase Analytics journey started after the exchange firm took over Neutrino in 2019, a secured intelligence platform. Then, the acquisition of Coinbase Analytics lead to several controversies in the crypto space as Neutrino founders were said to be involved with a particular Italian Hacking team known as Spyware.
Brian, however, explained that depended on an analytics software in its beginning stage but later sort to “bring the capacity in house” to prevent the involvement of third parties and the sharing of customer data, hence its acquisition of the Neutrino technology.
Armstrong also acknowledged that Blockchain analytics software is in demand, and Coinbase intends to bridge the gap between the traditional finance and the cryptocurrency industry through its partnerships with national law enforcement agencies.
Handling users data amidst contract with government
Coinbase users skeptical about the privacy of their data and compromise have been assured of anonymity. The exchange confirmed that customer data would not be tampered with, as the software will only be using data sourced from the internet. The CEO, however, suggested that privacy coins are one option for crypto-users who intend to stay completely anonymous.
He further explained that transactions can still be tracked on Blockchains that are made public; as such, the partnership with the U.S government should not be perceived as an infringement on customer privacy.