Coinbase Gets A Lot of Data Requests From Feds, Mostly FBI: Report

By Robert Stevens

Cryptocurrency exchange Coinbase today published a transparency report outlining how law enforcement requests information about its 38 million customers. 

The San Francisco-based exchange disclosed that between January 1 and June 30 of this year, law enforcement requested information 1,914 times; 96.6% of these requests concerned criminal investigations. For context, that's more than double the amount of law enforcement requests received last year by competing US-based exchange Kraken.

Law Enforcement Information Requests. Image: Coinbase

“These requests largely come in the form of subpoenas, but may also include search warrants, court orders, and other formal processes,” said Paul Grewal, Coinbase’s Chief legal officer in a blog post. However, Grewal said it is “restricted from disclosing some of the information requests we receive.”

Coinbase further disclosed that US law enforcement made 58% of these requests; UK authorities made 23%; Germany sent 9% of requests and European authorities made up most of the rest. 

Law Enforcement Requests Ranking. Image: Coinbase

Within the US, the FBI made 30.5% of requests; Homeland Security made 16.5%; State and local police made 16.2%; the Drugs Enforcement Administration made 9.3% and the Internal Revenue Service 8.8%. 

US Law Enforcement Requests. Image: Coinbase.

The Securities and Exchange Commission, the Commodity Futures Trading Commission, the Secret Service, the Postal Inspection Service, the Department of Justice and the Immigration and Customs Enforcement also made requests.

The report comes a month after the Electronic Frontier Foundation recommended that Coinbase publish the report. The EFF said it is “increasingly concerned that payment processors are being asked to turn over information on their customers, without any mechanism for the public to know who is making those requests, or how often.” 

Hayley Tsukayama, a legislative activist for the Electronic Frontier Foundation, told Decrypt, "We're definitely encouraged by Coinbase's commitment to expanding this report in the future. It's an important first step, to get a scope of what kind of requests Coinbase is getting but there are a lot of other types of information that we'd like to see in a report."

While she recognizes the limitations of how open law enforcement can be, Tsukayama said that the EFF would like to see how Coinbase handles requests, what sort of requests it receives, and the consequences of those requests—such as whether accounts are shut down in response. It's important to know these things, she said, since governments can infer a lot about your life by how you spend your money.

Grewal, Coinbase’s chief legal officer and author of the blog post, said, “we respect the legitimate interests of government authorities in pursuing bad actors who abuse others and our platform,” but that “transparency is a critical part of accountability and maintaining customer trust.”

"Other payment processors should follow suit," said Tsukayama.

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