Cambridge Analytica, SCL Group's American division and the company accused of harvesting the data of up to 87 million Facebook users, was working on launching its own Initial Coin Offering (ICO), according to a New York Times report. An ICO allows certain cryptocurrency projects to raise funds similarly to a stock Initial Public Offering (IPO), but with significantly fewer regulations.
Documents and emails obtained by the NYT showed that Cambridge Analytica’s psychological profiles on Facebook users also helped launch another cryptocurrency, called Dragon Coin, which seems to have ties to a famous gangster in Macau, going by the nickname “Broken Tooth.” Dragon Coin was supposed to make it easier for people to get their money in casinos from Macau, an island that’s part of China.
Cambridge Analytica was hoping that the funds raised through its own ICO would help the company build a system that would allow users to store and sell their personal digital data to advertisers, according to Brittany Kaiser, a former Cambridge Analytica employee.
The project was overseen by Cambridge Analytica CEO Alexander Nix, who was forced out of the company in March after he was caught bragging in a recording about the company’s political strategies designed to entrap opponents. Once he left the company, the cryptocurrency project, which was still in the early development phase, was put on hold.
When it started working on coin offerings last year, Cambridge Analytica was boasting to investors that it was able to use its psychographic profiles to target new investors for the token sale. This was before both Google and Facebook banned cryptocurrency ads from their platforms, because most of the ads were using “misleading or deceptive promotional practices.”
Jill Carlson, a consultant for cryptocurrency companies, said she attended a meeting in which Cambridge Analytica employees were bragging about helping Donald Trump win the election and also about using similar strategies in Mexico to help certain Mexican politicians.
Carlson said that this pitch from Cambridge Analytica seemed contrary to the openness and transparency of cryptocurrencies such as Bitcoin:
The way that Cambridge Analytica was talking about it, they were viewing it as a means of being able to basically inflict government control and private corporate control over individuals, which just takes the whole initial premise of this technology and turns it on its head in this very dystopian way.
Although Alex Tayler, Cambridge Analytica’s Chief Data Officer, was overseeing the company’s cryptocurrency’s project along with Nix, he also stepped down from the role of acting CEO. Julian Wheatland, the chairman of the SCL Group, Cambridge Analytica’s parent company, will take over as CEO, but it’s not clear whether or not the cryptocurrency project will be resumed.