Consensys’ Metamask: Update Raises Privacy Concerns

Consensys, the software company behind MetaMask, released a new update to its privacy policy on Nov. 23.

The company said that when consumers send transactions, it will collect consumers’ IP addresses and Ethereum wallet addresses. The new policy applies to users who use Infura as the default remote procedure call (RPC) provider in MetaMask.

with wit,

“Infura collects information when you use Infura as the default RPC provider in MetaMask… When you use Infura as the default RPC provider in MetaMask, Infura collects your IP address and Ethereum wallet address.”

Customers using their own Ethereum nodes or third-party RPC providers are not affected by the new rules — their IP and MetaMask addresses are under their control, as noted in an official Consensys post.

New tools may not be welcome

Infura is a key project in the Ethereum ecosystem. Infura, which focuses on Web3 decentralization, provides a key set of tools for developing dApps on Ethereum without complex infrastructure.

Developers can leverage the API Infura Ethereum to minimize code stress, making it easier to build dApps on the blockchain.

Consensys’ decision marks a major shift in efforts to fight financial crime. According to the team, collecting these databases requires compliance with existing know-your-customer (KYC) and anti-money laundering (AML) regulations.

ConsenSys also plans to use user-submitted information to contact them in the future about promotions, events and other news related to the company’s goods and services aimed at optimizing the platform.

some people are unhappy

The announcement sparked a lot of outrage in the cryptocurrency community. Most customers object to the idea of ​​allowing companies to track all incoming and outgoing transactions, whether they make sense or not.

As privacy is now a major concern, customers are forced to rethink maintaining their transactions with MetaMask wallets. Some recommend switching to other Infura alternatives, while others consider switching wallets.

In addition to the policy update, the criticism also revealed the long-awaited MetaMask governance token airdrop.

Last year, MetaMask co-founder Joseph Lubin hinted at the potential for a wallet token. People began to question whether the previous news was a ploy to attract more users to the Metamask wallet, as no further progress was made.

AML: A dead end for decentralization?

Consensys’ statement comes two days after decentralized platform Uniswap unveiled an update to the project’s privacy policy, including collecting on-chain data and restricting off-chain data such as client devices and web browser versions.

UniSwap does not collect data and store personal information, but may share wallet addresses with analysts to detect and prevent financial crimes.

People prefer centralized finance over decentralized finance. Even in cryptocurrencies that were originally designed to be decentralized, most people choose to keep their funds on the CeFi protocol.

This general mindset began to shift after the FTX exchange crashed. FTX is a well-known centralized cryptocurrency asset exchange.

Catastrophic events attract more and more people to decentralized protocols. According to blockchain analytics firm DeFi Llama, trading activity on decentralized exchanges has increased significantly during the turmoil.

The wave of access to DEXs leads to a peak in the number of new users for all Uniswap applications in 2022. However, with the latest privacy policy changes, it is clear that most DeFi projects are not fully decentralized. CeFi still has certain characteristics.

Most DeFi schemes operate autonomously, but they are also physically controlled and monitored by an individual or group, much like a centralized corporation.

Projects have teams that operate as boards or development teams, making key choices that determine their future course. It seems impossible that these companies are not held to the same standards as institutions when it comes to money laundering and compliance.

The post Consensys’ Metamask: Update Raises Privacy Concerns appeared first on Blockonomi.

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