On June 5, the Coinbase cryptocurrency platform was criticized for its alleged efforts to sell cryptocurrency services to both the U.S. Drug Enforcement Administration and the Internal Revenue Service.
In the following days, Coinbase representatives explained that the analytic services of the company did not transmit identifying data to law enforcement agencies. They claim to be the source of all data from publicly available information.
Big Brother has been following tabs for almost a decade
Although Coinbase’s failure may contain some truth, the source of the business, according to cryptocurrency cryptocurrency and bitcoin ATMs, has shown that many authorities actively track users in all key cryptography and central storage providers.
Speaking of anonymity, this source indicated that cryptographic monitoring methods date back to the early Bitcoin days. They said that these practices have become much broader efforts after a very poor mountain. The Gox event, where 850,000 BTC was lost on a crypto exchange that was once popular at the end of 2013.
Our source explained:
“I worked in cryptocurrencies, ATMs for bitcoins, general cryptography providers, etc. They all use observation methods. They have no choice. ”
When it comes to user monitoring, they say the preferred methodology for the US government is called the Suspicious Activity Report, or SAR. Although SARs are common to most money transfer companies, it seems that encrypted SARs work according to various criteria. They stated that:
“In traditional institutions, a transaction must meet certain criteria in most cases in order to be considered suspicious. This does not apply to bitcoins and other cryptocurrencies. When it comes to authorities, the “suspicious” threshold is satisfied when cryptocurrency is shared. ”
“Conservative organizations are legally required to provide SARs for any [suspicious] encryption transaction worth more than $ 5,000, regardless of other user actions. Lots of files for small volumes. Legal entities are prohibited from disclosing this reporting data to users or members of the public. “No. We can tell you what we told you – absolutely. Units cannot refuse to comply with this reporting tactic. If they do, they will lose the licenses that allow them to work. They may be fined or even imprisoned. “
Who are they and what do they want to know?
Answering a question about the agencies most interested in user-defined encryption data, our source said that “the reports are submitted to FinCEN, IRS, the FBI and other federal law enforcement agencies. He rules the whole area. ”
And it’s not just applying American law
“I’m sure that the USA, China, Japan, Russia, Great Britain, etc. It depends on where you are. But almost every world power has legal authority to verify key user data. ”
Our source also showed that the requested information is somewhat reliable. Agencies want to know:
“What kind of coins do you have, how many times do you trade, the most important source of money used to buy digital currencies, and how much profit you have made over a certain period. They can do it and ask for anything. They also keep track of where your coins are sent when they leave the central escort, so if you keep your coins in the refrigerator, there is a good chance that the office of one or more governments knows the address of the portfolio, no matter where it goes if the central exchange has, if you hold these coins, they can follow you. “
Are you being watched?
So, how do you know if you are one of the people (or currently controlled) by a government agency? Our source says that this is a very simple question: “If you have ever filled out information about AML, this is a good opportunity to request data from someone. Cryptocurrency monitoring is AML and KYC. Why do you think sites collect, enter this information when you subscribe? You will be controlled. ”
Although services cannot legally inform users that they have sent activity reports, there are signs that people may follow them:
“Accounts or frozen funds. If you have login issues that prevent you from accessing your account. Something like this probably means that you were exposed to a suspicious activity report without your knowledge. Or, perhaps, a government agency requested statistics about you or your money, in which case you may be refused to continue until the verification is completed. “