A source nearby plaid, the company that serves as “Data plumber” for Coinbase, Robin Hood, Square’s Cash App and many others denied all allegations in the recently filed class action lawsuit.
The entire complaint depends on the claim that Plaid sells user data to the “highest bidder”.. A plaid spokesman called this allegation “unfounded”.
Surgery to make money?
A source near the legal team of Plaid, who spoke to Cointelegraph on condition of anonymity, affirms that the company has never sold user data in any way. They also said that this was just a “money-making operation” for lawyers:
“You see companies in a certain position, such as being acquired or having an investment. And that’s a great operation to make money for them. “
This statement relates to the fact that Plaid is currently being acquired by Visa, an agreement that has not yet been finalized. This puts plaid in an endangered position.
Visa did not respond to Cointelegraph’s request for comment.
PNC Bank blocked plaid in 2019
The complaint alleges that Plaid collects data five years ago and that it progresses “over time”. Health-related data is also said to be collected without storing it in accordance with the Portability and Accountability Act of Health Insurance (HIPAA). Our source assured Cointelegraph of this Plaid only stores the amount of data that is required for the services provided by Plaid. They also said that the company did not intentionally collect users’ health data..
The source also contested the claim that Plaid stores the user’s credentials in “plain text”.what makes it vulnerable to hacker. Rather, the company takes “Security very serious”said the source.
In the complaint, a case from 2019 is mentioned as PNC Bank blocks plaid. It is said that was the reason “Aggregators access account numbers, many store them indefinitely, often without customers knowing.”. Our source declined to comment on this case.
Coinbase relies on plaid
The Coinbase website confirms that the company relies on Plaid to confirm the account and that the data is never passed on to the stock exchange, but remains with their “data installer”:
“For US customers, you can verify your account in just a few minutes by entering your bank details. You may be familiar with this process if you’ve ever checked a bank account in PayPal or similar services. These bank details will never be sent to Coinbase, but will be shared with a trusted and integrated third party, Plaid Technologies, Inc., to facilitate instant account verification. This service can store the credentials provided for verification purposes or use them per transaction to prevent fraud and to check whether there is sufficient credit available to process your transaction. “
Coinbase did not respond to our request for comment in time for publication.
As we have learned from numerous legal cases, a solution can take some time. On the other hand, The unfinished takeover of Plaid puts it in a vulnerable position. This can lead to an agreement sooner than expected.
The plaintiff’s legal team did not respond to Cointelegraph’s investigation.