Uniswap, a decentralised exchange (DEX), updated its privacy policy on 11 November, the same day of troubled exchange FTX’s bankruptcy. Updates to the policy have sparked a firm backlash from the crypto community, with many slamming its intent to store and collect user data.
In the blog post, the company explained that innovations in the blockchain that web3 hoped to “reclaim users’ privacy and choice” following decades of eroded policies from internet businesses.
Continuing, it said: “That’s why we’re releasing a new Privacy Policy today – we want to be crystal clear about what data we’re protecting and how we use any data we collect. Transparency is key. We never want our users to be surprised.”
The post later updated on 17 November, stating it would collect blockchain data, user device data, including browser and operating system information, and interaction with service providers.
It added that collected information would not include information that could personally identify users such as their name, address, email, or IP, among others.
The switch in policy received significant pushback from privacy advocates, who lambasted the company for backtracking on cryptocurrency’s core values of anonymity and privacy.
According to privacy-focused crypto platform Firo, Uniswap’s privacy push created a “dangerous precedent” for DEXs.
While we have the utmost respect in what @Uniswap has built, we strongly reject the incorporation of data collection to track user behaviour and onchain activity. This sets a dangerous precedent for DEXes. https://t.co/h4kCiQKtl7
— Firo $FIRO (@firoorg) November 21, 2022
It tweeted at the time: “While we have the utmost respect in what @Uniswap has built, we strongly reject the incorporation of data collection to track user behaviour and onchain activity. This sets a dangerous precedent for DEXes.”
STOP using @Uniswap $UNI
— Yoda Research (@YodaResearch) November 21, 2022
They’ve expanded their collection of on/ off chain data connected to your wallets
eg
– mobile deviceID
– cookies
– localStorage
– device/ browser language
– screen wallets via 3rd party
…
🚨even share social media activity with analytics provides. wtf
A representative from Yoda Research urged people to stop using Uniswap’s platform, stated they expanded on and off-chain data from wallets to “mobile deviceID, cookies, localStorage, device/ browser language, [and] screen wallets via 3rd party.”
“[They] even share social media activity with analytics [providers]. wtf,” it concluded.
DEX SpookySwap affiliate OwenP also criticised the move to store and collect backed information as strange, adding: “We were contacted […] by an infrastructure provider once who asked about our backend and what info we kept we were shocked by the question. ‘None of course’ [was] the answer.”
Transparency Push after FTX Collapse
Exchanges such as Binance, Crypto.com, and Solana vowed full transparency for their millions of users, adding they would publish “audited proof of reserves” following the collapse.
Crypto.com chief executive Kris Marszalek has joined a growing list of cryptocurrency firms publishing their “audited proof of reserves” in the aftermath of the FTX crypto scandal.
The comments come after crypto exchange FTX.US, Alameda Research, and 130 affiliate firms fell bankrupt on 11 November, sparking several exchanges to push for more transparency for their clients.
“[We] will publish the list of cold wallet addresses and balances for major assets within 24 hours. Full transparency,” Solana tweeted at the time.
