Enlarge / Coinbase, the California cryptocurrency exchange startup valued at $ 8 billion, bought an analytics firm started by former members of HackingTeam. You won't believe what happened next.
After a wave of protest from the cryptocurrency community, Coinbase CEO Brian Armstrong announced in a blog post on Monday that some of the leadership of a recently acquired blockchain analytics firm would "transition out of Coinbase." The reason for the outcry: those executives were former employees of HackingTeam, the Italian company that provides offensive hacking tools to law enforcement and intelligence organizations—including those of Saudi Arabia, Sudan, and other countries with poor human rights records. One piece of HackingTeam's malware kit, called Pegasus by mobile security researchers, was tied to surveillance targeting United Arab Emirates dissident Ahmed Mansoor—an Emirati blogger who has been arrested multiple times in the UAE and is still imprisoned.
Coinbase acquired the company in question—Neutrino—on February 19. Neutrino's technology maps blockchain networks, allowing the tracking of transactions, an important capability for both potential financial company customers and law enforcement agencies, and one that would allow Coinbase's cryptocurrency exchange to integrate with more traditional finance.
"Our mission as a company is to create an open financial system for the world," Armstrong said in his blog post. "To do this, the first step is to empower as many people as possible to get access to cryptocurrency. Since most of the money in the world is tied up in the traditional financial system, this means we need to connect to that system and be compliant with all laws and regulations as a financial service business."