Coinbase’s data managing partner Elliptic has refuted the exchange’s allegation that it sold its users’ data to third parties.
In an official post on March 4, Elliptic’s co-founder and CEO Dr. James Smith stated: “I have been disappointed to see reporting in the past few days which has incorrectly implied that Elliptic is distributing personal information for financial gain. Such comments fundamentally misunderstand the data we analyze, the insight we share with our clients, and the role we play in the industry.”
The London-based blockchain analytics firm detailed that it had no access to Coinbase’s user data, let alone sold it to other parties.
“Elliptic has no access to end users’ personally identifiable information. Our exchange clients, including Coinbase, do not provide us with any personally identifiable information about their users,” the company noted.
“Our clients use our solutions to screen specific transactions for risk. We do not require or request any transaction data that we can link to individuals and do not have any other client information such as names, addresses or social security numbers.”
The Serious Allegation of Leaking Data
The allegations were first publically made by Christine Sandler, the San Francisco-based exchange’s director of institutional sales, during an interview with financial news outlet Cheddar on March 2.
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Detailing the importance of the crypto exchange’s acquisition of Italian blockchain analytics firm Neutrino, Sadler stated: “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.”
The analytics firm also posted a FAQ elaborating the firm’s role in data management for Coinbase and as well as its other clients.
The firm clearly affirmed that “Elliptic never, ever requests or requires any end-user data from its clients” and neither it holds any KYC data.
Interestingly, in a blog post today, the exchange’s co-founder and CEO Brian Armstrong did not mention anything about the data leak.
“Until recently, we worked with several outside vendors that provide blockchain analytics, as most exchanges do. However, they didn’t support all the assets we wanted to have on our platform, so we knew at some point that we would need to bring this capability in house,” Armstrong stated.
In the same post, the US-based crypto exchange also announced that it is parting ways with the ex-Neutrino employees who had ties with the controversial Hacking Team.