Coinbase Admits Its Former Data Provider Sold Client Data

The exchange is facing backlash after the recent acquisition of a blockchain analytics firm.

Coinbase’s previous data partner sold user information to “outside sources,” revealed the crypto exchange’s director of institutional sales Christine Sandler.

In an interview with the financial news outlet Cheddar on March 2, Sandler defended the San Francisco-headquartered exchange controversial acquisition of the blockchain analytics firm Neutrino and made the stark revelation about its former third-party partner.

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Coinbase announced the acquisition of the Italian blockchain analytics startup on February 19 with a target to prevent illegal activities involving the exchange’s accounts. However, as the deal attracted a lot of negative attention when the background o Neutrino’s co-founders surfaced.

Neutrino was founded in 2016 by Giancarlo Russo, Marco Valleri, and Alberto Ornaghi. All the co-founders were directly affiliated to Hacking Team, a controversial software company, whose spyware has reportedly been used by a number of international governments and law enforcement agencies.

Pointing out the importance of the acquisition, Sandler told Cheddar: “We are aware of the backgrounds of some of the folks that were involved in Neutrino. The compelling reason for making the acquisition was that Neutrino had some really industry leading and best-in-class technology.”

The acquisition even pushed the circulation of the hashtag #DeleteCoinbase across various platforms of social media against the US’ largest crypto exchange and wallet platform.

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“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 added.

XRP – Security or Not?

In addition, the director also touched on the heated debate over XRP being security or not as the exchange recently listed XRP on its retail and professional platform.

According to Sandler, the exchange is prepared to offer securities trading with the acquisition of broker-dealer Keystone in June 2018.

“There had been a groundswell of interest in adding the asset to the platform,” she said. “There was some speculation about whether the asset would be classified as security or not — we’re not securities lawyers. We felt there were compelling arguments on either side.”

Diar, a blockchain research company, pointed out that the crypto exchange is violating its own guidelines by listing XRP as the token is highly centralized and 60 percent of the coin’s circulation is still under the control of the developers.

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