Cinneamhain Ventures partner Adam Cochran expressed his disappointment at the decentralized derivatives exchange dydx’s decision to collect and store biometric data of new users as part of a promotion.

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very disappointed to see $DyDx to go down this road.

There were some legal grounds for them to justify some blocking – but biometric collection is never acceptable. pic.twitter.com/OcHnbCw8Cp

— Adam Cochran (adamscochran.eth) (@adamscochran) September 1, 2022

The platform promised 25 USDC to new users who deposited at least 500 USDC and were verified by creating a webcam image. The promotion was voluntary.

dydx explained the initiative with the need to eliminate the creation of additional accounts that make it difficult to run marketing campaigns.

Cochran noted that the collection of biometric data is unacceptable even if the platform has legal grounds to justify account bans.

The next day, dydx canceled the promotion, arguing that the interest in the campaign had been underestimated. According to him, “thousands of new users” took advantage of the offer.

Due to the overwhelming demand for the $25 deposit bonus promotion, we are ending the offer with immediate effect. Thank you to the thousands of new users who joined dYdX today. We really underestimated the attention the campaign received.

– dYdX (@dYdX) September 1, 2022

Cochran noted that thousands of users are genuinely interested rather than criticizing the platform. He expressed hope that other industry participants would not engage in the misuse of user data, especially when it comes to biometrics transmitted and stored by a third party.

The terms of the promotion state that user photos are transferred to an external GDPR compliant server. It does not contain a key to bind the image to a particular wallet.

Cochran said it will stop using the service, although it has been quite active in the past. He won’t change his perspective until he sees meaningful changes.

The expert emphasized that he sees this as dangerous when the team prioritizes growth over users. He expressed surprise that Dydx founder Antonio Giuliano did not share a similar position.

According to Cochran, dydx sees user privacy as a commodity and an acceptable risk to the possibility of accelerating growth. This undermines team trust.

“Users are not your product. Our data is not an acceptable “compromise” for your profit, stressed.

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Hire and empower in-house lawyers who can speak up who represent their consumers and protect their interests, particularly with regard to privacy.

Users are not your product and our data is not an acceptable “compromise” for your bottom line.

— Adam Cochran (adamscochran.eth) (@adamscochran) September 1, 2022

The Cinneamhain Ventures partner expressed hope that the fully decentralized v4 version of the platform can be managed by users who put privacy first.

Recall that dYdX blocked the accounts of users who had previously interacted with the sanctioned Ethereum mixer Tornado Cash.

The platform acknowledged that the sudden flood of blockchains affected “many users” who were often unaware of the source of their funds and did not directly use the service.

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