When Coinbase acquired blockchain analytics provider Neutrino, it had high hopes the purchase would help it monitor the range of cryptocurrencies in its stable. What it got instead was a #DeleteCoinbase movement on social media.
The reason, according to a tirade of critics, was down to all three members of Neutrino’s board being previously involved in a company called Hacking Team. The company, based in Italy, is alleged to have sold spyware to oppressive regimes in Saudi Arabia, Sudan, and Venezuela. Coinbase, in a bid to salvage the purchase, has sacked Neutrino’s executive board. But this just opens up even more questions.
In an original statement, Coinbase CEO Brian Armstrong said the acquisition was made because other blockchain analytics providers did not offer support for the broad range of cryptocurrencies the exchange had on its books. However, it was later revealed that the acquisition was in fact, designed to help stop third parties selling user data. Armstrong admitted Coinbase did not do enough due diligence, and as a result, those who worked at Hacking Team will transition out of Coinbase.
According to its website, Neutrino only has three team members: CEO Giancarlo Russo, CTO Alberto Ornaghi, and CRO Marco Valleri, all based in Milan, Italy. These have all been involved with Hacking Team, with Ornaghi and Valleri being the two founding members of it. This means Coinbase will have to fire its entire executive suite. But if Coinbase does sack the whole team, who will run the company?
Some have suggested that the team members might be spun out to a separate company and then be contracted by Coinbase to run the Neutrino software. Developer Udi Wertheimer—who was a big supporter of the #DeleteCoinbase movement—said on Twitter, “Coinbase customers will want to know that these people weren’t just ‘transitioned out’, but that Coinbase doesn’t use them or their companies as contractors either.” A similar post on Reddit asked a bunch of similar questions.
Coinbase is already fighting fires after news emerged this week that the company had been leaking data. While head of sales Christine Sandler admitted its former analytics provider had been selling data, there has been no official statement over the scale of the leak and what kind of data was sold.
This uncertainty is unlikely to dampen the spirits of those who are protesting. Perhaps instead of hiring an analytics platform to investigate its customers, it needs to be more forthcoming about its own shortcomings.