Coinsbase has been hot on the news for some days now. From the controversial addition of XRP to the controversial purchase of Neutrino, the hashtag #DeleteCoinbase has generated a lot of heat. As if the tension isn’t enough yet, a fresh scandal started yesterday when the Institutional Sales Director of Coinbase, Christine Sandler, said that Coinbase providers were illegally selling user data to outside sources.
Coinbase Providers Were Selling User Data
Coinbase is the number one cryptocurrency exchange in the United States. It has built a good reputation over the years. However, it’s clean reputation is at the verge of being stained due to all the recent scandals the company is trying to shake off. Sandler said Coinbase decided to add XRP because it was the right move. There had an interest in adding the token and didn’t add it because they were bribed. In her words:
“I think there was some speculation that the asset would be classified as a security or not; we’re not securities lawyers. We felt that there was some speculation that the asset would be classified as a security or not. We felt that there were compelling arguments on either side to deem it a security or not.”
Following this, she said that irrespective of the speculations surrounding the XRP token, they decided to add the token to meet the needs of their ever-growing client base. She said that in the event XRP is classified as a security, there are things in place that will protect them from getting into trouble with regulators. In her words:
“We acquired a broker-dealer late this summer, Keystone. That allows us to have that infrastructure, so to the extent that it actually is classified as a security, we will be prepared for that. But in lieu of that we thought we could add it to the platform because, at the end of the day, we felt that there were really strong arguments on either side.”
After talking about the company’s decision to add XRP, she went into the company’s acquisition of Neutrino. According to her, Coinbase was fully aware of Neutrino’s reputation but they had compelling reasons to acquire the firm. She said that irrespective of the bad name some members of the Neutrino team have gotten, the firm has leading industry technology. She went on to say that Coinbase had to leave its current analytic company because they found out that they were selling customer information to external sources. In her words:
“Our current providers were actually selling our client data to outside sources and it was really compelling for us to kind of get control over that and have proprietary technology that we could leverage on to keep the data safe and to protect our clients.”
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Since Sandler made these comments, there have been social media discussions about this issue. Members of the cryptocurrency community are wondering if user data was breached before Coinbase noticed this problem. However, Sandler’s comment hasn’t done much to keep angry users calm. The #Deletecoinbase is still trending on Google and social media. In fact, it’s possible that Sandler’s comments will be used as attacking points to justify why Coinbase should be deleted.
Do you think revealing this information about the former Coinbase providers is going to increase the intensity of the outrage? Share your thoughts in the comment section.
Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.