This gets the timeline a bit wrong. WhatsApp’s user base was largely built up during a period of lax security, including unencrypted message databases on Android SD cards, and easily spoofable addresses. The introduction of end-to-end encryption in conjunction with Open Whisper Systems was not until well after the FB acquisition and plans for it were undoubtedly part of the acquisition terms.

Contemporaneous to this was the rewrite of the privacy policy to allow sharing of metadata between FB and WhatsApp user accounts, which was a bit of a sell out.