Coinbase’s compliance office this week revealed that it in order to fully comply with regulations, the company was implementing new rules that would enable the exchange to acquire operational information from bitcoin mining companies.
Of course, that mining companies weren’t too happy to hear this. Besides going against all that bitcoin should stand for, it is also considered an attack on mining company’s financial privacy.
Immediately after being released, the community started to criticize these new rules, while Coinbase tried to excuse for the demands claiming it needed more transparency from the mining companies in order to fully comply with regulations and consumer protection demands.
Pressure from regulators has led Coinbase’s compliance office to contact mining companies asking to fill a questionnaire which included several requests for details.
It is obvious that the company is trying to protect itself because it has a high market volume and the last thing it needs is to have the Feds or a Class action come after them for liquidating stolen bitcoins or for dealing with bitcoins used in illicit practices. However, with this Coinbase seems to be getting on par with much of the banks’ practices and further away from the original concept designed for bitcoin.
Big mining companies like Bitmain and MegaBigPower have been complaining about being asked for detailed information regarding their equipment, mining facilities and even videos and photos along with demands for more financial disclosure. Some mining companies considered this to be too invasive since it reaches out for the company’s corporate secrets.
These financial intermediaries have real costs with compliance and once full regulations are in place their fees are going to eventually equal banks’ fees. The community argues that it’s time to start thinking about options other than companies like Coinbase.