Coinbase received 1,914 requests in 6 months from FBI, ICE and other agencies

Coinbase published its first Transparency Report, a notable step for the cryptocurrency industry.

Coinbase received 1,914 requests in 6 months from FBI, ICE and other agencies

Coinbase published its first transparency report on Friday, revealing the scope how often law enforcement agencies targeted the cryptocurrency giant for customer information.

According to the report, Coinbase received 1,914 requests for information in the first 6 months of 2020 alone. Nearly 60% of those came from state and federal agencies in the U.S.—primarily from the FBI, Homeland Security and the DEA.

Dozens of requests, however, came from other agencies, including the U.S. Postal Inspection Service and the immigration enforcement agency, ICE:

Outside the United States, the U.K. and Germany accounted for the vast majority of law enforcement requests. Coinbase received such requests from more than three dozen countries during the first part of 2020, including from Singapore and Slovakia.

Coinbase’s Chief Legal Officer, Paul Grewal, summarized the findings in a blog post. Grewal, a former federal judge who is well known in Silicon Valley, wrote that the company “will not hesitate to push back” against unreasonable requests, citing a high profile legal tussle between Coinbas and the IRS.

Grewal’s report, however, does not say what proportion of the time Coinbase challenged the law enforcement requests—information that is typically provided by Google and other tech companies that publish transparency reports. A source close to the company told Fortune that Coinbase, which has over 38 million customers worldwide, will include this information in future reports.

The transparency report is notable because it is the first such document to be published by a cryptocurrency company, and comes after the Electronic Frontier Foundation (EFF’s), a digital rights organization, called on Coinbase to issue one.

The EFF’s demand, as well as the findings of the report itself, underscore how law enforcement has taken an enormous interest in Bitcoin and other cryptocurrencies in recent years. While it is possible to buy and sell crypto without an intermediary—allowing users to transact in near-anonymous fashion—most users turn to services like Coinbase, which provide a link to the conventional banking system.

The new report from Coinbase, which has long positioned itself as a mainstream and law-abiding financial company, comes as U.S. law enforcement has grown more aggressive in forcing crypto companies to comply with rules such as “know-your-customer.” Earlier this month, the Justice Department charged senior executives at the popular exchange BitMex with violating the Bank Secrecy Act.

The Coinbase report concludes with a call by Grewal for more companies in the financial sector to follow the tech industry’s example of publishing data about law enforcement activities.

“We think it is important not just for cryptocurrency companies, but for fintechs and banks at large to shed light on financial data sharing practices and contribute to the understanding of industry trends in a meaningful way,” Grewal writes.

A final notable feature about the Coinbase report is a reference to “Civil or Administrative” requests, which made up 3.4% of overall government inquiries. While such requests may refer to demands from civil agencies like the SEC, they can also encompass controversial requests known as “National Security Letters.” These letters, which are the subject of ongoing constitutional disputes in federal courts, allow the FBI to include a gag order with demands for data—barring the company from even disclosing the existence of such a request. Coinbase declined to comment about whether it had received such requests.

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Source : Fortune More