by Matthew Russell Lee, Patreon Book Substack
SOUTH BRONX/SDNY, Oct 11 – With the US Congress passing the cryptocurrency GENIUS Act, Ripple Labs as well as Circle and others, have applied for banking charters to the Office of the Comptroller of the Currency. Now Coinbase has applied. Inner City Press has FOIAed the many withheld exhibits.
On October 11 Fair Finance Watch filed a timely comment with the OCC, including:
FFW is troubled that Coinbase is trying to withhold basic policies, amid compliance including privacy violations. Also, this should be subject to the Community Reinvestment Act; inquiry is needed into Coinbase's vague statement that "Coinbase’s products and services are designed to enable individuals and small businesses across the economic spectrum to benefit from the unique advantages presented by crypto assets." How? Inner City Press has submitted a FOIA request for the policies, and request for expedited treatment. The comment period should be extended.
Note for example that "Coinbase already knew about the leak of its customers’ data a full four months before the major breach. In practice, the crypto-exchange had declared in May to the SEC that it was aware of the fact that hackers had accessed employee data “without work necessity” in the “previous months.” The insider employees have been located at its outsourcing partner, TaskUs. The key episode of this affair occurred in Indore, India, where the TaskUs employee was caught photographing the work computer screen with her personal cellphone. According to five former employees of the company, the woman was involved in an illicit operation of transferring sensitive Coinbase customer data to hacker groups, possibly in exchange for bribes.
The application states that it would be exempt from the Community Reinvestment Act - FFW disagrees - and does not make any of the required showing of meeting convenience and needs of community, or being of any public benefit. It does however say "Coinbase’s products and services are designed to enable individuals and small businesses across the economic spectrum to benefit from the unique advantages presented by crypto assets." More information should be demanded and made public in this regard, before the comment period can close. The comment period should be extended.
Why is the "Data Retention and Disposal Policy" withheld and secret? Consider: ”A new class action lawsuit alleges Coinbase collects and shares biometric data without first obtaining user consent. Plaintiffs Scott Bernstein, Gina Greeder and James Lonergan filed the class action complaint against Coinbase on May 13 in Illinois federal court, alleging violations of the Illinois Biometric Information Privacy Act (BIPA) and the Illinois Consumer Fraud and Deceptive Business Practices Act (IFCA). According to the lawsuit, Coinbase uses facial recognition technology to verify users’ identities but fails to obtain the required consent from users before collecting their biometric data. The lawsuit claims that Coinbase’s identity verification process involves users uploading a photo of their government-issued ID and a selfie. The company then uses facial recognition software to analyze and compare the images, generating a unique digital representation of the user’s face, known as a face template or face scan. However, the plaintiffs allege that Coinbase does not inform users that their biometric data is being collected or provide them with the required notice and consent forms, which is a violation of the BIPA. Coinbase allegedly shares users’ biometric data with third-party vendors The lawsuit further alleges that Coinbase shares users’ biometric data with third-party vendors, such as Jumio and Onfido, without obtaining users’ consent. These vendors provide the facial recognition software used by Coinbase, and the lawsuit claims that they also store users’ biometric data on their servers. "
The policies must be made public, the comment period must be extended and on the current record, the application must be approved.
FFW will have more to say when it receives responses to its and Inner City Press' FOIA requests. On the current record, the application(s) could not legitimately be approved.
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