Coinbase executive defended the controversial acquisition of blockchain intelligence firm Neutrino in an interview with financial news channel Cheddar on March 1.
The acquisition of Neutrino by Coinbase, one of the largest crypto exchanges, was first announced on Feb. 19, and was spurred by the “really industry leading and best-in-class,” blockchain analytics tools, Anti-Money Laundering and Know Your Customer technology that the startup had.
The acquisition, however, quickly became controversial after details of Neutrino’s co-founders’ backgrounds were revealed. Specifically, their involvement with intelligence firm Hacking Team, who have reportedly provided spyware to a myriad of international governments and law enforcement agencies, some of who allegedly had an authoritarian regime.
This revelation became the drive behind the #DeleteCoinbase hashtag. In response to the community’s uproar Christine Sandler, Coinbase’s director of institutional sales, defended the decision by saying that it was important to leave their current providers, as they were selling Coinbase user data to outside sources. Sandler told Cheddar:
We are aware of the backgrounds of some of the folks that were involved in Neutrino. 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.
The interview also mentioned the recent decision of Coinbase Pro to list XRP, for which the debate “is it a security or not?” is still ongoing. Sandler highlighted that the acquistion of broker-dealer Keystone in June 2018 allowed Coinbase to list securities. She further added:
There had been a groundswell of interest in adding the asset to the platform. There was some speculation about whether the asset would be classified as a security or not — we’re not securities lawyers. We felt there were compelling arguments on either side.