Coinbase Clarifies It Never Shared Customer Data

| Publish date: 03/06/2019
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Coinbase is trying to clarify statements that had been made after its acquisition of Neutrino, the Blockchain analytics firm. This acquisition created a lot of controversy as the firm was reportedly linked to Hacking Team, a group that had helped governments with a track record for human rights abuses.

Unfortunate Statements

In an interview last Friday, the director of institutional sales at Coinbase, Christine Sandler, had justified the exchange’s acquisition of Neutrino by stating that the analytics provider that the company had previously employed had been found to be selling their client data to third parties. This caused a huge uproar.

On Tuesday, a spokesperson from Coinbase clarified this statement. The representative stated that Coinbase had never shared any of its customers’ personally identifiable information with outside analytics vendors.

Despite this clarification, the company did not specify which analytics firm Sandler had been referring to. Coinbase also did not specify what kind of data had been commercialized by this analytics firm because of which the exchange had raised objections.

Current Industry Standards

Currently, the norm in the industry is that analytics firms collect transaction data that has been scrubbed of all personal customer information such as names and other account details. This anonymous data is commercialized by analytics companies and sold to customers who wish investigate any suspicious activity.

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The co-founder of Chainalysis Jonathan Levin explained that analytics firms often received such information but they did not receive any personal data. Levin also stated that they never sold any of the data they did receive to external companies.

In fact, Elliptic, a competing analytics firm, released a blog post that it had worked with Coinbase in the past and had never been provided with data that had personally identifiable information about the exchange’s users.

Increasing User Concerns

The company has been facing an increasing backlash since it made the announcement that it acquired Neutrino. A number of users have left the exchange. In fact, some customers publicly stated that they were leaving Coinbase specifically because of the Neutrino acquisition.

Another former Coinbase user stated that he was concerned about his personal data because the exchange was notorious for not taking action against employee misconduct. He was referring to a lawsuit that is currently ongoing in California, where Coinbase’s employees have been accused of insider trading.

An investigation by media giant Fortune revealed that Coinbase’s internal probe into the allegations yielded no results as senior management insisted that no misconduct had taken place.

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