Welcome back to another CryptOsint!

Please let me know if you ever want a particular topic featured or a specific question answered. All feedback, suggestions, and questions can be sent to brenna@bellingcat.com.

The Privacy Battle

As we all know, privacy is a big thing in the crypto world. I’d go as far as to say that many blockchain enthusiasts ascribe to privacy the same sacredness as that of religion. So, you can imagine their dismay when Buzzfeed News uncovered the crypto-giant Coinbase has been testing out Clearview AI’s controversial facial recognition technology.

According to Buzzfeed’s reporting team:

A spokesperson for Coinbase said the company was testing Clearview because of its "unique needs around security and compliance," but it was not using the service with customer data. "Our security and compliance teams tested Clearview AI to see if the service could meaningfully bolster our efforts to protect employees and offices against physical threats and investigate fraud," they said. "At this time, we have not made any commitments to use Clearview AI.

Coinbase could not be reached for comment by CryptOsint.

Crypto-privacy purists have not been happy with this discovery. Though they would be highly displeased with any exchange involved with Clearview AI, the fact that it was Coinbase worsens pre-existing tensions between this community and the exchange.

Coinbase is generally considered one of the most regulated exchanges in the world as it has gone to substantial lengths to instill Anti-Money Laundering (AML) efforts and Know Your Customer (KYC) policies. Similar to policies upheld in traditional financial institutions, this means Coinbase requires users to provide information such as a government ID, address, and/or bank account numbers to make transactions on the exchange. 

Some find these efforts admirable and necessary. These policies can help keep illicit activity at a minimum and preserve the integrity of the crypto transacting on Coinbase. Some researchers have gone as far as to say that AML/KYC policies are necessary to crypto going mainstream.

Others find such policies to be a kind of surveillance and a violation of users’ rights. 

So, I’m interested to see what you all think. Is there a legitimate reason for exchanges to be using Clearview AI? If you don’t think so, what about AML/KYC policies? Do you see them as different or one and the same? Let me know at brenna@bellingcat.com. 

Libra Update

Another win for Libra: crypto broker Tagomi joined the Libra Association last week. 

Here is TechCrunch’s John Constine with more:

Joining Libra means Tagomi will be expected to contribute at least $10 million toward developing the cryptocurrency, with that investment eligible to reap dividends from interest earned on money kept in the Libra Reserve. Tagomi will also operate a node that validates transactions coming through the Libra blockchain.

Tagomi was founded by Jennifer Campbell, a former investor at Union Square Ventures, which is also a Libra Association Member. The company has 25 employees across five offices. Tagomi will be the 22nd member of the Libra Association, according to information from the startup’s press representative, who was apparently supposed to hold this news until later. “Tagomi is joining the Libra Foundation and Jennifer will be the newest member,” they emailed TechCrunch.

Campbell and Tagomi will offer technical and policy support to Libra in an effort to make the cryptocurrency safer and compliant with international law. That will be critical for the Libra Association to get the green light from regulators for launch in 2020 like it originally planned. Lawmakers in the U.S. and EU have slammed Libra in hearings and the press over its potential to facilitate money laundering, harm privacy and destabilize the global financial system.

Blockchain in Beijing

I know this section is called Blockchain in Beijing, but I’m seriously considering renaming it Coronavirus and Crypto. Onto the news...

Last week, the former president of the People’s Bank of China said the coronavirus might accelerate the launch of China’s digital currency. Then, state-funded media reported that the currency launch will likely be delayed because of the epidemic. 

Also, someone decided to make a crypto that capitalizes on the number of people who are diagnosed/die from the coronavirus. The CoronaCoin allows traders to bet on the statistics of the disease and will diminish every two days based on the number of coronavirus cases.

Obviously, the CoronaCoin is problematic, yet reading up on it also taught me something new: The World Health Organization issues pandemic bonds and they’re equally messed up.

WHO started issuing pandemic bonds in 2017 with the intent to support communities struggling with disease. The reality of the bonds, however, draws eerily similar comparisons to the CoronaCoin.

The Guardian's Karen McVeigh interviewed Harvard Global Health Iinitaitive’s Olga Jonas, who explained that the bonds only pay out when a disease has spread for a long time, ergo after many people have died.

“What’s obscene is that the World Bank set it up this way,” Jonas said. “It waits for people to die.”

McVeigh explained that, in order for the bonds to become useful with regards to the coronavirus, several complex conditions must be met: 

Funds can only be released after a certain amount of time and in accordance with complex criteria including outbreak size, growth rate, deadlines and death tolls. In the case of coronavirus, the bonds would not pay out until 12 weeks after the World Health Organization (WHO) publishes its first “situation report”, which would not be until 23 March. Another criterion is that the outbreak is still growing.

The disease has infected more than 82,000 people and killed over 2,800 people in 51 countries to date, but has not yet been declared a pandemic by the WHO.

Apparently, pandemic bond investors collect interest payments until the conditions for a pandemic are satisfied. Since the coronavirus outbreak, the value of WHO pandemic bonds have halved, apparently worrying investors. Which is kind of funny because, according to McVeigh, investors have already received more money from the bonds than countries facing disease outbreaks.