Coinbase’s Neutrino acquisition caught in oppressive state
Coinbase’s acquisition of blockchain intelligence platform Neutrino has caused a kerfuffle with revelations that it’s inherited staff members with links to states of oppression.
“We had a gap in our diligence process”
As reported last month, Coinbase bought the Milan-based firm. Financial details were not disclosed. Neutrino, which was founded in 2016, will continue to operate as a standalone business.
However, as part of that deal it got senior management staff who were part of Italian company Hacking Team. The latter’s website explains that it sells “offensive technology to the worldwide law enforcement and intelligence communities”.
But if you dig a bit deeper, it gets darker. A 2015 report by Motherboard found that Hacking Team sold software to countries with a reputation for repression – such as Kazakhstan, Azerbaijan, Oman, Saudi Arabia, Uzbekistan, Bahrain, Ethiopia, Nigeria, and Sudan.
There are many media reports out there highlighting Hacking Team’s track record.
For example, The Intercept pointed out in 2015: “Hacking Team has an unusually public profile for a purveyor of surreptitious technology, and it has drawn criticism because its malware has shown up on the computers of activists and journalists.”
With this in mind, Brian Armstrong, Coinbase CEO, was determined to set the record straight.
He explains: “We examined the players, found that Neutrino had some of the best technology in this area [blockchain analytics], and decided to acquire them.
“However, 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.”
Armstrong also did some looking around: “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. This was not an easy decision, but their prior work does present a conflict with our mission.”
There are no specific details in terms of the timeline and which staff will be departing.
If we find out, we’ll let you know. That’s because we don’t live in a repressive state.
