New ConsenSys Policy Involves Collection Of IP Addresses Through MetaMask

On November 24th, MetaMask developer ConsenSys revised its privacy policy to begin tracking MetaMask users IP addresses as well as Ethereum addresses whenever they send a transaction. The update is for MetaMask customers who use Infura as their RPC (Remote Procedure Call) provider. Infura is a ConsenSys affiliate and the default RPC provider for all MetaMask wallets.

In related news, ConsenSys successfully generated $450 million in a series D round earlier this year, valuing the company at $7 billion which ranks it among the biggest players in the cryptocurrency sector.

Important details

MetaMask and Infura are both owned by ConsenSys. Infura manages blockchain nodes for wallets and individuals. When users make a blockchain transaction using their MetaMask wallet, the transaction is broadcasted to the Ethereum blockchain by Infura. Additionally, MetaMask communicates with Infura via a RPC.

Essentially, the update informs users that if they switch their RPCs to another provider, ConsenSys will not collect their data. They will, however, be subject to the information collection policy implemented by the RPC provider of their choice.

Moreover, according to the updated ConsenSys privacy policy, if the users choose Infura as their default RPC provider in MetaMask, Infura would collect their IP address as well as their Ethereum wallet address whenever a transaction is sent. Also, if users connect MetaMask to their own Ethereum node or a third party RPC provider, neither Infura nor MetaMask shall gather their IP address or Ethereum wallet address.

What comes next?

The decision by ConsenSys to gather user data was made shortly after the announcement by Uniswap wherein it was revealed that the decentralized exchange had begun collecting on-chain data via its users. The exchange stated that the main reason for this was to try and make decisions driven by and based on empirical data which could then significantly enhance user experience.

To that end, many companies collecting on-chain data, such as blockchain addresses and transactions, and off-chain data, such as IP addresses, are concerned that individuals could easily be identified and thus the amount of privacy available on the network would drastically decrease. Nonetheless, MetaMask Founder Dan Finlay stated on Twitter that he believes MetaMask does not use IP addresses, even if they are temporarily stored.