Coinbase says it’s looking into its controversial new acquisition that triggered a #DeleteCoinbase campaign on Twitter.
The backlash began after Coinbase revealed a February acquisition: Neutrino, a blockchain analytics company that has spearheaded projects for the startup Hacking Team. According to Motherboard, Coinbase was well aware that Hacking Team sold spyware to governments with a history of human rights abuses, including Sudan, Saudi Arabia and Ethiopia.
In a report published in 2013 by Reporters Without Borders, Hacking Team is one of five companies singled out as an “enemy of the internet”.
“Without advanced technology, authoritarian regimes would not be able to spy on their citizens. Reporters Without Borders has for the first time compiled a list of five ‘Corporate Enemies of the Internet,’ five private sector companies that it regards as ‘digital era mercenaries’ because they sell products that are used by authoritarian governments to commit violations of human rights and freedom of information. They are Gamma, Trovicor, Hacking Team, Amesys and Blue Coat.”
Some Coinbase customers are deleting their accounts to send a clear message that they won’t tolerate strategic partnerships that value profits over people.
Not that I’m @coinbase’s biggest customer by any stretch of the imagination, but I’m done.
— Udi Wertheimer (@udiWertheimer) February 27, 2019
I made excuses for @coinbase far longer than they deserved.
There are now plenty of alternatives, some have far better UX (@cash), and their partnering with Hacking Team makes it impossible for me to dismiss their obvious cowardice & lack of ethics. Long overdue #DeleteCoinbase pic.twitter.com/4nahCaQqCH
— Guy Swann ⚡[Pay me in Bitcoin] (@TheCryptoconomy) February 28, 2019
Coinbase’s head of sales Christine Sandler told Cheddar the company is investigating the issue.
“We are aware of the backgrounds of some of the folks that were involved in Neutrino, and we are looking into that. The compelling reason for making the acquisition was that Neutrino had some really industry leading and best-in-class technology.
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.”
Adding fresh fuel to the backlash, however, Sandler noted that some of Coinbase’s former business partners sold customer data – a revelation that triggered more outrage on Twitter. Tuur Demeester of Adamant Capital questioned how admitting that Coinbase worked with unethical companies explains its decision to work with more unethical people.
😧 revelation from @Coinbase.
– Was customer privacy breached? (or only aggregate data)
– How long have you known?
– Did previous tracking providers break contract? (why no lawsuit yet)
– How is this an argument explaining acqui-hire of unethical people?https://t.co/KP4LVD7Yhs pic.twitter.com/JLXGh9YlW4
— Tuur Demeester (@TuurDemeester) March 3, 2019
As Coinbase is under fire for its strategic alliances, the Neutrino acquisition overshadows earlier efforts by CEO Brian Armstrong to help oppressed people around the world. Last year, Armstrong launched GiveCrypto, a philanthropic initiative that distributes cryptocurrency to people living in poverty.