Coinbase’s controversial acquisition of analytics startup Neutrino has received lots of criticism, although one executive member explained the move as provident in light of the exposure of its former provider selling users data to third parties.
Last week, the largest cryptocurrency exchange in the US announced that it had acquired analytics platform Neutrino. The latter’s founding members were a part of the Hacking Team – a notorious tech firm accused of selling software to countries with poor human rights records. And while the news didn’t sit well with some of the exchange’s users, a protest was undertaken on Twitter with the ‘#DeleteCoinbase‘ hashtag supposedly meant to motivate users to withdraw all funds from the exchange and closing the accounts.
The fear is that those founding members of the Hacking Team, Marco Valleri and Alberto Ornaghi, now incorporated into Coinbase’s business exposes the userbase to unpredictable personal data harm. However, the head of institutional sales at Coinbase, Christine Sandler, had said that the move to acquire Neutrino was a necessary one, saying:
“It was important for Coinbase to bring this function in-house to fully control and protect our customers’ data and Neutrino’s technology was the best we encountered in the space to achieve this goal.”
She further defended the action stating that they were more interested in the technology than the talent, suggesting that Neutrino’s technology far outdid what was currently available in the industry.
The move may have been necessitated when the exchange discovered that the previous third-party provider was selling client data to outside sources. However, no previous announcement about this matter was made known to the public, which further questions the trust placed in Coinbase, as it supposedly withheld important information regarding its users’ data.
Ironically, the choice for Neutrino does raise an alarm seeing that the very reason they had fired the previous was what the currently acquired team members of Neutrino have been accused of doing. Reporters Without Borders have previously named the Hacking Team as one of the “Five Corporate Enemies of the Internet“.
One important question is whether the exchange will recover from this scandal, seeing how they may have lost trust from the cryptocurrency community with this singular move.
Coinbase frequented the news for the better part of 2018 and has so far in 2019 made a few headlines. It has been involved in many acquisition and developments that have made the platform outstand most cryptocurrency exchanges even with the bear market.
One of its recent development was the listing of Ripple’s XRP coin, which many may have been eagerly waiting for, considering that it is among the top three largest cryptocurrencies by market capitalization. The move has been questioned, seeing that the Securities and Exchange Commission is yet to provide a classification for XRP – whether or not it’s a security. However, the exchange seems to think it has a way of insulating itself should any consequence arise.
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