Carta has decided to close its liquidity services business, which matched buyers and sellers of private company stock, Axios has learned.

Why it matters: The issue became a flashpoint over the weekend, when an entrepreneur disclosed that a Carta "liquidity solutions" salesperson had improperly accessed confidential company data via Carta's primary business, which manages cap table information for startups.

• Carta was most recently valued at $8.5 billion.

What they're saying: "Because we have the data, if we are trading secondaries, people will always worry that we are using the data, even if we are not," CEO Henry Ward wrote in a blog post confirming the change.

• "So we have decided to prioritize trust, and exit the secondary trading business."

Flashback: In responding to the controversy on Sunday, Ward acknowledged that it might not be tenable for Carta to act as both a database and a marketplace.

• That conflict now appears to be resolved.

Backstory: Carta, founded a decade ago, gained popularity as a startup cap table management software provider.

• Over the years, it has added new products, such as fund administration tools for venture capitalists.
• More recently, it has invested into building out what it hoped to be marketplace for trading private company stock, whose promise has fueled the ongoing support from new and existing investors.

Yes, but: That secondary transaction business has remained small — only bringing in about $3 million in annual revenue, per Ward.

• Compared that to the $250 million it gets from cap table management, and $100 million from fund administration.

The bottom line: "Just the appearance of impropriety is damning," Ward wrote.

• "And so we will exit the secondary trading business to eliminate any concern that we are not acting in our founders' best interests."

Go deeper: Carta, a key tech company for startups, has a credibility problem

Editor's note: The story has been updated with a confirmation from Carta and more details throughout.