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Highlights
- Dogecoin developer just called out Coinbase Wallet over privacy concerns
- He labeled the exchange's L2 Base among the platforms to beware of
- He ultimately advised paying taxes to prevent surveillance
Mishaboar, a Dogecoin community member and developer has flagged Coinbase Wallet and the entire exchange’s ecosystem over privacy-related concerns.
Coinbase Wallet and Base Privacy Concerns
According to Mishaboar, Coinbase Wallet is a widely used smartphone wallet that was recently optimized for DeFi use. Despite the popularity, the Dogecoin developer believes the risks of using this self-custodial is generally understated.
Mishaboar noted that the privacy concerns in using Coinbase Wallet become amplified when it is connected to the associated account. By this connection, he noted that users are fully de-anonymizing and linking transactions across several chains.
Privacy concerns have always been a major bone of contention in the industry. With regulators prying across trading platforms for suspicious transactions, many have moved their activities from Centralized Exchanges. The use of non-custodial wallets remains key, however, with this warning, the tracking fears seem not to be going away.
Dear #Dogecoin, Coinbase Wallet is a reliable smartphone wallet, and many are using it. Recently they overhauled it, so it can be used to trade on DeFi platforms more easily.
Anyhow, it seems few mention the risks to privacy coming from this wallet, especially if you connect it…
— Mishaboar (@mishaboar) May 4, 2024
The Dogecoin developer pointed out that Coinbase is not hiding that it generally collects users’ data.
“Coinbase admits to collecting a lot of information in their Terms of Services even if you do not connect the wallet to your Coinbase account,” he wrote in his account on X. “They are collecting information about your account, including your username and transaction history, and if needed, they might share collected information with authorities.”
Beyond the wallet, the developer also dragged in Base, the firm’s Layer-2 scaling protocol. Besides Base being heavily centralized, Mishaboar noted that the L2 is filled with VC-backed meme tokens. These meme coin activities have contributed to pushing the transaction metrics of Base, above its peers like Arbitrum.
Learn to do the Right Thing
With the lack of privacy on Coinbase Wallet and other ecosystem solutions, Mishaboar advised users to do the right thing. In this regard, he noted that the exchange’s service users need to be law-abiding and tax-paying citizens.
He noted that this is important as failure to disclose might place users at loggerheads with authorities, and Coinbase may not be trusted. US tax authorities are boosting their surveillance capabilities to ensure everyone pays their taxes when due.
To show good faith, billionaire investor Mark Cuban revealed he paid about $275 million in taxes recently. He mentioned this as a way to encourage crypto proponents to abide by the core tenets of the law.
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