Cryptocurrency exchange Coinbase faced some heat when some users started a Twitter campaign #DeleteCoinbase, after reports emerged that the exchange was colluding with companies that sell customers’ data.
The media reports about Coinbase acquiring Neutrino, a blockchain analytics company that has spearheaded projects for the startup Hacking Team. The latter (Hacking Team) was touted as a company that sold spyware to governments with a history of human rights abuses, including Sudan, Saudi Arabia and Ethiopia and Coinbase was allegedly aware of this fact, a news portal DailyHodl reported.
In face of the Twitter campaign, some users stated that they were not happy about the exchange allegedly selling data to third parties. A user using the hashtag said, “YOU DID WHAT?!?! A @coinbase official responds to #DeleteCoinbase by saying they had to acquire Neutrino because their previous tracking provider SOLD COINBASE CUSTOMER DATA TO THIRD PARTIES. And that’s why we should trust the people you choose to do business with?!?!”
YOU DID WHAT?!?!
And that’s why we should trust the people you choose to do business with?!?! https://t.co/XBb3ncHmxI
— Udi Wertheimer (@udiWertheimer) March 3, 2019
Coinbase has not specifically denied the allegation. In the past, it had put out a disclaimer of sorts, justifying why it shared information with third parties. It had said, “We obtain information about you from public databases and ID verification partners for purposes of verifying your identity. ID verification partners use a combination of government records and publicly available information about you to verify your identity. Such information includes your name, address, job role, public employment profile, credit history, status on any sanctions lists maintained by public authorities, and other relevant data. We obtain such information to comply with our legal obligations, such as anti-money laundering laws. Pursuant to EEA Data Protection Law, our lawful basis for processing such data is compliance with legal obligations. In some cases, we may process additional data about you to ensure our Services are not used fraudulently or for other illicit activities. In such instances, processing is necessary for us to continue to perform our contract with you and others.”
However, the exchange put out a statement trying to put out the fires. Coinbase’s head of sales Christine Sandler, was quoted as saying, “We are aware of the backgrounds of some of the folks that were involved in Neutrino, and we are looking into that. The compelling reason for making the acquisition was that Neutrino had some really industry leading and best-in-class technology.”
She added, “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.”
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