FEATURED:

Cambridge Analytica sought to create its own digital currency: reports

Cambridge Analytica sought to create its own digital currency: reports
© Getty

Cambridge Analytica reportedly planned to raise funding through an initial coin offering (ICO) before it became the subject of controversy for improperly obtaining the data of 87 million Facebook users.

ADVERTISEMENT

The British research firm, which also worked for the Trump campaign, planned to conduct an ICO to raise capital — a tactic used by cryptocurrency-based projects for funding, according to The New York Times.

Despite being used by many legitimate companies, the process has also become a vehicle for scams. In recent months, U.S. regulators have threatened to crack down on the practice.

Cambridge Analytica’s digital token was intended to help individuals store and sell their personal data, a former employee told the Times.

The coin’s development was reportedly helmed by Alexander Nix, the British research firm’s chief executive and one of the figures at the center of the Facebook data scandal.

The firm intended to raise $30 million with an offering, according to a source who spoke with Reuters.

“Prior to the Facebook controversy, we were developing a suite of technologies to help individuals reclaim their personal data from corporate entities and to have full transparency and control over how their personal data are used,” a Cambridge Analytica spokesman said in an email to Reuters.

“We were exploring multiple options for people to manage and monetise their personal data, including blockchain technology.”

During the recent cryptocurrency boom, many companies have taken advantage of ICOs to raise money outside of the scrutiny and tight regulations of federal agencies like the Securities and Exchange Commission (SEC).

Companies have raised $6 billion through ICOs over the last year.

In many cases, digital tokens issued are essential to the success of some business models. But in other cases, firms use ICOs as a way to circumvent securities regulation.

The SEC has begun to shut down companies they believe are violating securities laws.

SEC Chairman Jay Clayton has signaled that he may expand the crackdown to all ICOs.