Coinbase CEO explains why they sell blockchain analytics software to the U.S. secret service

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Coinbase was in the crosshairs over the weekend after SEC filings revealed the business licensed transactional information software to regulators.

The firm's Analytics software won a four-year contract offered by the Secret Service this year; pegged at over $180,000 and ending in May 2024.

Yesterday, CEO Brian Armstrong took to Twitter explaining the exchange's decision-but critics weren't impressed.

Crypto firms like Chainalysis have been around a long time and use publicly available blockchain data to weed out bad actors.

This needs AML laws and the use of blockchain analytics software for transaction monitoring, he noted.

Coinbase used third-party vendors in the past to maintain the AML service required for a legal crypto operation.

Armstrong reveals the business did not "Like sharing data with third parties when we can avoid it," presumably leading to establishing its in-house Analytics software.

There is an existing market for blockchain analytics software, so we sell it to a handful of folks as well.

"Blockchain analytics software is essentially just compiling publicly available data that is already out there on the blockchain, trying to organize it to make it more useful."

Actively seeking a relationship with authorities makes your company an enemy of Bitcoin, just as other analytics companies as long as they don't work on making themselves redundant by championing privacy improvements.