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In recent years, there’s been a big discussion on user privacy protection laws and companies’ behavior in a lot of the public forms. Big companies like Facebook and Google have come under fire for failing to protect or actively seeking to exploit user’s private data acquired through their services. The public appears to be very sensitive to the issue, and understandably so.
In the crypto space, the issue has raised its head this week after Coinbase’s director of institutional sales, Christine Sandler, defended the cryptocurrency exchange’s controversial acquisition of blockchain intelligence firm Neutrino with claims that the previous providers were selling users’ data.
In an interview with the financial news channel Cheddar, Sandler said that their previous analysis providers were selling user’s data to outside data sources. Coinbase first announced the acquisition of the firm Neutrino last month. At the time, Coinbase stated that it intended to use the startups advanced blockchain analytics tools, Anti-Money Laundering and Know Your Customer technology. The acquisition, however, became controversial quickly because of the background of Neutrino’s co-founder.
According to some reports, one of the firm’s founders was involved with a commercial software firm Hacking Team. This news raised some eyebrows due to the fact that spyware developed by Hacking Team had been used by a plethora of international governments and law enforcement agencies under authoritarian regimes. Because of these connections, Coinbase came under fire from the crypto community and the hashtag #DeleteCoinbase was born.
In the interview, Sandler defended the company’s decision to acquire Neutrino, saying:
“We are aware of the backgrounds of some of the folks that were involved in Neutrino […] It was important for us to migrate away from our current providers. They were selling client data to outside sources and it was compelling for us to get control over that and have proprietary technology that we could leverage to keep the data safe and protect our clients.”
She also implied that because of the amazing tools and technologies under Neutrino having great value, it was important to the Coinbase management to bring them in-house. Intentionally or not, the statement undermined the talent and resources that came with the acquisition which includus some great senior employees with distinguished work histories.
Sandler also talked about the firm’s decision to list Ripple (XRP)trade which also triggered some stakeholders to voice concerns because of the fact that Ripple might be listed as a security in the near future inside the US. She said that there was a lot of speculation about whether or not XRP would be listed as a security. She explained that the firm thought both sides had compelling arguments but they went ahead with the decision anyway.