Coinbase Failed to Disclose Its Third-Party Vendor Was Selling Client Data
Coinbase has faced the wrath of the crypto community since announcing the acquisition of blockchain analytics firm Neutrino for an undisclosed amount last month. The team behind Neutrino, which was added to the Coinbase ranks, was previously caught selling surveillance software to governments with atrocious human rights records.
This has resulted in a growing trend of Coinbase users to publicly delete their accounts while promoting the #DeleteCoinbase hashtag.
Director of Institutional Sales at Coinbase praising Neutrino’s “best-in-class technology” and saying that they needed to migrate to another “provider” because their previous one was “selling client data to outside sources.” (1:25)
— Janine (@J9Roem) March 3, 2019
Now, things have gotten a whole lot more complicated for Coinbase after Christine Sandler, Coinbase’s director of institutional sales, revealed in a recent interview with Cheddar that the company’s previous analytics provider was selling client data.
“It was important for us to migrate away from our current providers,” Sandler said when asked about why Coinbase bought Neutrino. “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.”
As anticipated, the backlash has been significant following this revelation, as the exchange never disclosed this breach of user trust. Many notable influencers are calling on Coinbase to release an official statement.
Genuinely not trying to fear monger, but as a concerned customer it would be great if @coinbase could provide clarity around the statement from one of their reps that their analytics provider sold client data to 3rd parties.
— Jill Carlson (@_jillruth) March 3, 2019
Wow. I’m really struggling to view Coinbase’s actions in anything but the harshest light.
1. Deal with blockchain tracing firm
2. Discover that firm selling client data
3. Don’t disclose this to anyone
4. Buy a firm that is made up of human rights violators
5. Profit?!? https://t.co/9om7HRxape
— Riccardo Spagni (@fluffypony) March 3, 2019
This comes as Coinbase has been defending its recent listing of XRP — the original topic of the Cheddar interview.
Image: Marco Verch / Flickr Share Image: Cheddar
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.