The PR nightmare triggered by Coinbase’s acquisition of a firm with spyware ties has pushed the crypto exchange into damage-control mode.
It all started when Coinbase announced the acquisition of Neutrino, a blockchain analytics firm whose executives were previously hand in glove with repressive world governments in suppressing voices of dissent.
Of course, there was no question of Coinbase walking away from an already-finalized deal with Neutrino given the possible legal consequences emanating from any such drastic move. However, the heat from the wider crypto community was probably a bit too much for the exchange to ignore.
As a result, it has now announced that the executives at the heart of this controversy “will transition out of Coinbase.”
Crypto Community Makes Itself Heard
Neutrino, which is to remain a stand-alone entity post-acquisition, is led by Giancarlo Russo as the CEO, Marco Valleri as the Cheif Research Officer, and Alberto Ornaghi as the Chief Technical Officer.
According to a recent report, all three of these top Neutrino executives were previously members of Hacking Team, a firm that the Reporters Without Borders named one of the five biggest corporate enemies of the internet.
Hacking Team’s international clientele included several world governments that often draw the flak from civil rights advocates for suppressing voices of dissent with espionage and intimidation. These include countries such as Saudi Arabia, Sudan, Nigeria, Oman, Bahrain, Ethiopia, and Uzbekistan.
Notably, the company is also believed to have helped the US Federal Bureau of Investigation (FBI) in its controversial digital surveillance operations.
Following Coinbase’s acquisition of Hacker Team, a large number of critics took to social media condemning the move. In a matter of hours, the hashtag #DeleteCoinbase went viral and more and more people joined the protests. Under pressure, Coinbase refused to issue an official statement on the matter.
Hacking Team Executives Won’t Be a Part of Coinbase
After nearly two weeks since the controversy erupted, Coinbase co-founder and CEO Brian Armstrong finally broke the silence and hinted that some reconciliatory actions were in order.
“[…]we had a gap in our diligence process. While we looked hard at the technology and security of the Neutrino product, we did not properly evaluate everything from the perspective of our mission and values as a crypto company.”
“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.”
Meanwhile, there are speculations that Coinbase’s decision to acquire Neutrino was, at least partially, prompted by the resignation of Soups Ranjan, the former Director of Data Science and Risk, earlier this January.
After Ranjan’s departure, the crypto exchange was under pressure to regroup and re-strengthen its analytics team and make sure that it was in line with all legal and regulatory requirements.