Recently Coinbase has been involved in a quite big problem due to the acquisition of Neutrino, causing many of its users to even decide to close their accounts on the platforms.
In this way, Coinbase is taking steps to clarify statements made as a result of its controversial acquisition of blockchain analysis firm Neutrino, a company later linked to Hacking Team, a group that helped governments known for rights abuses. humans.
Specifically, Christine Sandler, director of institutional sales for Coinbase, justified the acquisition of Neutrino during an interview with Cheddar last Friday saying that the previous analysis provider of the exchange was “selling customer data to external sources.”
Declarations that evidently generated a feeling of great concern in the crypto ecosystem. Coinbase now says that Sandler did not express himself in the right way.
In fact a spokesperson offered by the international media, said on Tuesday that the exchange “never shared the personal identification information of our clients with any external provider of blockchain analysis.”
Although Coinbase refused to specify what previous partner Sandler was referring to or what type of data was being marketed the way he objected, it is important to note that blockchain analysis companies sell aggregate wallet data (without names or information identification personnel) as their main patented product.
The industry-wide standard is for analytics providers to collect data from anonymous transactions and market access to that information for customers looking to investigate suspicious activity.
For example, the co-founder of Chainalysis, Jonathan Levin, recently explained to the media that companies often receive information from wallets and transactions without names or other account information and use it to help customers across the ecosystem identify to the bad actors. He said that they do not receive personal data from clients and never sell data to external companies.
The Elliptic competition analysis firm confirmed in a blog post that it worked with Coinbase and was not provided with “any personally identifiable information about its users”. Provided other exchanges and customers with addresses and transactions associated with financial crimes, according to the blog entry.
Although, the question of whether Coinbase would adopt a similar model, or look for other ways to monetize user data after its acquisition of Neutrino, was arguably ambiguous.
During an interview in February, Coinbase’s director of engineering and product, Varun Srinivasan, said the Neutrino team would continue to serve external customers, converting the transaction data of other companies into a patented Coinbase offer.
A spokesperson for Coinbase told CoinDesk on Tuesday it will not “share broad sets of transaction information and addresses with suppliers if it’s beyond their immediate scope of work” as part of any offer.
The statements follow the publication on the blog of Coinbase CEO Brian Armstrong on Monday in which he said that Neutrino staff with previous connections to the controversial software firm Hacking Team will abandon their new roles in Coinbase. Armstrong made his announcement in an official publication of the published blog. However, at the time of publication, this seems to have done little to calm users’ concerns.
Armstrong gave his official statement, which recognizes that “although we thoroughly analyzed the technology and safety of the Neutrino product, we did not properly evaluate everything from the perspective of our mission and values as a cryptographic company.” Then he declared:
“Together with the Neutrino team […] we have reached an agreement: those who previously worked in Hacking Team (although they do not have a current affiliation with Hacking Team), will leave Coinbase”.
Many do not want anything with Coinbase
Although it is not clear how many users have left the exchange, there have been many who have reported that they closed their account after the acquisition of Neutrino.
Other users note that the publication of Armstrong’s blog lacked responsibility as the publication emphasized that the co-founders of the Hacking team “have no current affiliation” with the controversial software provider.
Another former Coinbase user, who uses his Twitter account @Lowbtc, told the media that he is concerned about his personal data because Coinbase has a history of allegedly not having punished the employees who misbehave, referring to an ongoing lawsuit in California in which exchange employees claim privileged information.
Fortune reported that an internal investigation of the alleged insider trading at Coinbase concluded without any repercussions because the leadership said there were no irregularities.
Speaking in that broader context, @Lowbtc, who opened his Coinbase account in 2013 and quickly closed it after the acquisition of Neutrino, said:
“In addition to the ethical failure, I also believe that this is a massive security risk, allowing those people to have access to customer data. It’s really scary to think who has gained access to Coinbase’s customer data over the years.”