The much controversial acquisition of Neutrino by Coinbase has raised the hackles of the crypto community. The latest revelation by the Coinbase head of sales, Christine Sandler, only managed to make things worse as she said,
“They (current providers) were selling client data to outside sources and it was compelling for us to get control over that and have proprietary technology that we could leverage to keep the data safe and protect our clients.”
Wow. I’m really struggling to view Coinbase’s actions in anything but the harshest light.
1. Deal with blockchain tracing firm
2. Discover that firm selling client data
3. Don’t disclose this to anyone
4. Buy a firm that is made up of human rights violators
5. Profit?!? https://t.co/9om7HRxape
— Riccardo Spagni (@fluffypony) March 3, 2019
Now, co-founder and CEO of Coinbase, Brian Armstrong has come forward and is trying to get things straight after receiving much backlash and #DeleteCoinbase movement currently running in the market.
I wrote a post about our recent acquisition of Neutrino. These decisions aren’t easy but this is the right outcome. https://t.co/P1n8NAv4Dl
— Brian Armstrong (@brian_armstrong) March 5, 2019
Sharing the back story on this acquisition and taking the decision to go forward with this, Armstrong threw light on his mission which requires them to empower people to access cryptocurrency.
“Our mission as a company is to create an open financial system for the world. To do this, the first step is to empower as many people as possible to get access to cryptocurrency.”
However, he points out that due to the money being tied up with the traditional financial system, Coinbase needs to be compliant with laws and regulations and hence the implementation of know-your-customer (KYC) and anti-money-laundering (AML) that involves blockchain analytics.
“Bitcoin — and crypto more generally — is about the rights of the individual and about the technological protection of civil liberties.”https://t.co/faqXmWh8z1
— Coinbase (@coinbase) March 5, 2019
In order to provide blockchain analytics, Coinbase worked with several outside vendors but they didn’t cover all the assets that Coinbase has on its platform. After examining the players, Coinbase found that “Neutrino had some of the best technology in this area, and decided to acquire them.” Brian says they didn’t evaluate Neutrino on their perspective of mission and values but only much recently.
“We took some time to dig further into this over the past week, and together with the Neutrino team have come to an agreement: those who previously worked at Hacking Team (despite the fact that they have no current affiliation with Hacking Team), will transition out of Coinbase.”
Brian acknowledges that sometimes there needs to be practical trade offs but this wasn’t the right one. Now, in order to become the most, secure, trusted and, legally compliant crypto company, they will fix this issue and would serve its customers in another way.
Crypto community is appreciating Brian’s turn to transparency and putting it out there for the people while further taking the steps forward.