By
Benjamin Njiri
April 23rd, 2024
Consensys is not the first company to collect more data from users.
Blockchain node provider, Infura, will now collect IP and Ethereum addresses when users perform on-chain transactions according to a revised ConsenSys policy update.
Infura is an API-based tool that allows users to plug into the Ethereum chain using any of its nodes. The infrastructure-as-a-service provider is used by multiple Web3 projects including ConsenSys’ self-custody wallet, Metamask, which has up to 21 million monthly active users.
According to ConsenSys, developers who use a third-party RPC provider or another Ethereum node will not be subject to these policy updates. ConsenSys noted that it may disclose all such collected information as part of business deals or KYC and AML requirements by law enforcement.
Negative Reactions Trail ConsenSys Policy Update
The announcement has attracted negative comments across the crypto community. According to Adam Cochran, partner at Cinneamhain Ventures, stated:
“Metamask has provided a great free service for a long time, but their decision to log IPs and tie it to transactions is unacceptable.” Cochran believes that people have a right to anonymity when it comes to their financial data and Metamask can no longer provide that with this new update.
Reacting to the announcement, Ethereum advocate Anthony Sassano compiled a list of Infura alternatives that do not collect user data. Web3 and Decentralization advocate, Chris Blec, advised people not to ignore the development, warning there was more to it. He said:
“This is how you will be cancelled from the financial system in the not-so-distant future. This is how they’ll do it.”
It isn’t just ConsenSys
Despite the reaction, ConsenSys is not the first company to collect more data from users. They are also unlikely to be the last with increasing calls for improved data collection.
In September, the IMF published Fintech Notes’ Recommendations for Prudential and Conduct Regulation of the Crypto Ecosystem. The paper recommended improved data collection as an approach to more effective risk monitoring by regulators.
Thus, ConsenSys joins companies like Coinbase who have also added IP collection to their collected data. Similarly, Uniswap recently announced that it would begin collecting blockchain data and information about user devices, browsers, and operating systems. Uniswap however noted that it was not collecting any personal identifying information like names or IP addresses.