Coinbase, one of the largest US digital currency exchanges headquartered in San Francisco, California, is continuously looking for new growth opportunities, and one of the most popular ways to expand is an acquisition. Recently, the company acquired Neutrino, a blockchain intelligence platform.
At first sight, everything seemed to be gas and gaiters. However, the exchange users started to do some research and found out a quite controversial thing. It has been revealed that the executives of Neutrino were involved in the development of malware and were selling customer information to third parties.
In an interview with Cheddar, Christine Sandler, the Coinbase Head of Marketing, said:
“We are aware that Neutrino’s co-founders previously worked at Hacking Team, which we reviewed as part of our security, technical, and hiring diligence. It was important for us to migrate away from our current providers. They 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.”
“Coinbase does not condone nor will it defend the actions of Hacking Team, but it was important for Coinbase to bring this function in-house to fully control and protect our customers’ data and Neutrino’s technology was the best we encountered in the space to achieve this goal.”
It is notable that in the statement protecting company data has been mentioned. However, that data had already been sold to ‘outside sources’, and it is still unclear what kind of data was stolen and when it happened.
Neutrino and the Hacking Team
Neutrino has been known as a go-to analytics platform for assisting law enforcement agencies and financial institutions to monitor transactions on the blockchain. According to BreakerMag’s David Z. Morris, Neutrino CEO Giancarlo Russo, CTO Alberto Ornaghi, and CRO Marco Valleri were in charge of Hacking Team, a notorious Italian IT firm whose software has helped authoritarian governments spy on their citizens. Neutrino founders plied their wares as cyber gurus for the firm.
On its website, the Hacking Team states:
“We believe that fighting crime should be easy; we provide effective, easy-to-use offensive technology to the worldwide law enforcement and intelligence communities.”
Further, the website reads:
“Criminals and terrorists rely on mobile phones, tablets, lap tops and computers equipped with universal end-to-end encryption to hide their activity. Their secret communications and encrypted files can be critical to investigating, preventing and prosecuting crime. Hacking Team provides law enforcement an effective, easy-to-use solution.”
The Hacking Team has been implicated in several serious crimes. They reportedly worked with the Saudi enforcement unit that was later involved in the murder of the Washington Post correspondent Jamal Khashoggi. The firm helped the repressive Ethiopian regime monitor expatriate dissidents’ activities.
The Hacking Team also cooperated with a wide range of governments around the world, including Sudan and Morocco, enabling them to commit violations of human rights and freedom of information.
After this breaking news, a #DeleteCoinbase movement arose on Twitter and many users deleted their Coinbase accounts. The movement was started by a developer Udi Wertheimer who called Coinbase users for transferring residual Bitcoin to each other on the company’s books so they could drain and delete their accounts.
How Coinbase will respond to that is currently unclear. But the exchange will definitely try to counter this aggression.