Hello!

It looks like the Coinbase customers are not happy with the last movements of the company and they are starting to withdraw huge amounts of Bitcoin from their exchange. According to Glassnode data they withdraw 22,000 more Bitcoins than they deposited. This quantity is worth $215 million dollars approximately.

You must wonder why, right? I will try to cover all the pieces of this story.

Neutrino acquisition, a blockchain analytics company

As Brian Amstrong wrote in this post (link HERE), they recently announced the acquisition of Neutrino, which is a company specialyzed in Blockchain analytics.

They share some of the reasons that pushed them to buy this kind of company:

Since most of the money in the world is tied up in the traditional financial system, this means we need to connect to that system, and be compliant with all laws and regulations as a financial service business.
Any cryptocurrency exchange that touches the banking system must implement a know-your-customer (KYC) and anti-money-laundering (AML) program, and a key part of those programs is blockchain analytics.

As you can imagine, they want to be the most secure, trusted, and legally compliant bridge to cryptocurrency. For that reason, they should ensure that are law-compliant in all aspects. In addition, we all know that the United States are not a crypto-friendly country, so they must be really sure they follow the law.

# Coinbase wants to sell blockchain analysis software to the IRS and DEA

Public documents show that Coinbase wants to sell blockchain data, analysis, software to Government agencies IRS and DEA. According to theblockcrypto.com:

Records obtained by The Block show that the U.S. Drug Enforcement Administration (DEA) and the Internal Revenue Service (IRS) intend to buy licenses from Coinbase for an analytics platform called Coinbase Analytics. Documents related the purchases by the IRS and DEA were published in April and May, respectively.

And then this happened

The Coinbase customers withdraw 22,000 more Bitcoins than they deposited in a single day. It seems that they don't want their data to be sold, displayed or tracked and sold to Government agencies. You can see the Glassnode Studio chart below (Source):

To put things in perspective, it just happened 1 time before. When Coinbase saw almost an equal withdrawal in July of 2017 (22,500 BTC) worth a lot less than now, obviously.

Coinbase should be careful about this, the customers showed that they don't like this kind of deals.

Coinbase still has 1,000,000 Bitcoins on their exchange

The impact of this withdrawals however it is not devastating for Coinbase, as they still are HODLing almost 1,000,000 BTC in their wallets.

This is more than any other exchange. In the chart below you can see the Coinbase Balance vs the Total Exchange Balance for Bitcoin.

Enjoy and take care! 🐝