Coinbase cryptocurrency exchange has found itself in hot water after its acquisition of blockchain analytics firm Neutrino.
The crypto community lashed out against Coinbase for the acquisition due to a controversial past of Neutrino’s key team members. Prior to their work on Neutrino, the members had worked with Hacking Team, a blockchain group that gave information to law enforcement and dictatorial regimes.
As Smartereum reported, Coinbase CEO Brain Armstrong assured that Coinbase and Neutrino have agreed to transition the members with ties to hacking Team out of Coinbase.
It appears, however, that Coinbase needs to do more explaining.
While reportedly trying to justify the acquisition of Neutrino as in-house blockchain analytics, Coinbase director of institutional sales Christine Sandler reportedly told Cheddar News that its previous third-party analytics provider was selling client data to outside sources.
Coinbase has now come out to clarify the Sandler’s statement and put to bed any feelings of insecurity among its user base. According to crypto news outlet Coindesk, a spokesperson from the exchange has come forward to set the record straight.
“… [we] never shared our customers’ personally identifiable information with any third-party blockchain analysis vendors,” the spokesperson told Coindesk. The spokesperson, however, did not disclose the third-party firm Sandler was referring to.
It is common for analytics firms to collect anonymous data from platforms (including crypto exchanges) and sell to clients. This data can be used to help identify malicious actors and other worrisome patterns.
The response from Coinbase corroborates a statement from Elliptic, a blockchain analytics firm that once worked for Coinbase.
Elliptic’s statement read:
“Our exchange clients, including Coinbase, do not provide us with any personally identifiable information about their users. Our clients use our solutions to screen specific transactions for risk […] We only allow our solutions to be used in order to combat financial crime, and do not allow it to be used for marketing, business intelligence, or any other purpose.”
The Coinbase spokesperson noted that Neutrino as a part of Coinbase will not “share broad sets of transaction and address information with vendors if it is beyond their immediate scope of work”