Edward Snowden criticizes Coinbase for complying with regulations

Whistleblower Edward Snowden worries about Coinbase's close relationship with regulators and compares the exchange to Facebook.

Whistleblower Edward Snowden is worried about Coinbase's close relationship with regulators and compares the exchange to Facebook.

Former NSA worker and whistleblower Edward Snowden has harshly criticized the American crypto exchange Coinbase over how it handles user data and its close ties to regulators.

Toxic and Embarrassing

In an interview, Edward Snowden called Coinbase's strict commitment to identification and anti-money-laundering laws "toxic and embarrassing". The exchange's compliance strategy, he said, continues to drive centralization and data leaks with its actions. The whistleblower compared the rise of the crypto exchange to Facebook’s emergence as a central platform. According to Snowden, some naive users saw the platform as the internet itself. Unknowingly, Facebook amassed vast amounts of data and information, Snowden said. The whistleblower warned that something similar could await the crypto sector. Especially since companies like Coinbase and governments that joined the sector have "ignored users' interests".

Crypto sector is in danger

Snowden also argued that the crypto sector risks repeating the mistakes the internet sector made in the early days of Web 2.0 during its global rollout. Snowden accused Coinbase of "putting regulatory compliance above the ideals of the blockchain". This boosts profits, but doesn’t help society, Snowden said.

Moreover, Snowden argues that monitoring user data and behavior is not a job for crypto exchanges, but for governments or law enforcement. He urged all crypto exchanges to "bend more strategically". They should also "leave the sector" and make room for the "protocols and values" on which the sector is built. However, it remains doubtful whether Edward Snowden's critique will fall on open ears.