Cambridge Analytica, the political data company at the heart of the recent Facebook scandal, was reportedly planning to launch its own virtual currency.
Cambridge Analytica quietly started exploring the option in 2017. They planned to launch an initial coin offering to raise funds for the company. The virtual currency would also be used to reward voters in exchange for filling out political surveys.
The strategy was part of a broader push that the firm was making into the world of cryptocurrencies throughout 2017.
Cambridge Analytica was previously best-known among the public for acquiring Facebook data for use in political campaigns.
The company’s decision to explore cryptocurrencies “pushed the firm into murky ethical and legal situations,” according to The New York Times, which obtained documents and emails regarding Cambridge Analytica’s cryptocurrency marketing efforts.
The New York Times obtained evidence showing that Cambridge Analytica promoted a digital currency called Dragon Coin, for example. That coin made headlines for its association with an infamous gangster in Macau named Broken Tooth.
Why Did Cambridge Analytica Need An ICO And Cryptocurrency?
The real question is: why did Cambridge Analytica feel the need to launch its own cryptocurrency and ICO? What did the company hope to accomplish?
The main goal of the proposed ICO appears to be to raise funds for the company. Cambridge Analytica wanted to raise money to pay for the creation of a system to help people store and sell their online personal data to advertisers, according to The New York Times, citing Brittany Kaiser, a former Cambridge Analytica employee who disclosed the information in an interview.
The cryptocurrency endeavor was overseen by the British chief executive of Cambridge Analytica, Alexander Nix, who was forced out of the company in March after bragging about his company’s approach to political work in other countries – including how Cambridge Analytica used shell companies and other strategies to entrap political opponents.
Cambridge Analytica wanted to use the currency for more than just fundraising, however. The New York Times claims the company had proposed ideas to use virtual currencies in political campaigns, sending virtual currencies to people in remote parts of Mexico in exchange for filling out surveys for political campaigns within the country.
The Virtual Currency Project Is On Hold For Now
Due to the recent Facebook data revelations, Cambridge Analytica’s cryptocurrency project appears to be no hold for now. It’s unclear if the company has scrapped the project entirely or if they’re waiting for a more opportune time to launch.
Industry analysts, meanwhile, see it as a controversial move for the company. Initial coin offerings have been largely performed outside of the boundaries of existing securities laws. Many ICOs avoid regulatory oversight, raising the issue for significant fraud.
“There are only a handful of more controversial areas it could have expanded its business into,” said Tim Swanson in a statement to The New York Times. Swanson works as a consultant to companies in the ICO and blockchain space.
We don’t know much about the future of Cambridge Analytica’s virtual currency. However, we know that the company worked with several ICOs throughout 2017. It’s unclear how Cambridge Analytica worked with the controversial Macau-based Dragon Coin, for example, although they didn’t market the coin publicly. Instead, they reportedly worked behind the scenes to email potential partners and investors, arranging for these VIPs to take an all-expenses paid trip to a glitzy Dragon Coin event in Macau.
It’s unclear which other ICOs Cambridge Analytica worked with – if any. No further ICOs are mentioned in the report by The New York Times.
Ultimately, Cambridge Analytica has performed successful work for political campaigns around the world. A virtual currency could help the company expand its influence even further. Or, this entire Cambridge Analytica cryptocurrency project could disappear. Stay tuned for more information as the story continues to unfold.