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Does Coinbase Have An Ethics Problem?

Does Coinbase Have An Ethics Problem?
And crypto twitter wasn't having it

Depending on who you follow on twitter or social media, Coinbase was mostly discussed like this in the past weeks:

coinbase crypto

Which quickly turned into this:

coinbase crypto


The riots began soon after Coinbase rolled out the red carpet for their acquisition of Neutrino- a startup focused on blockchain analytics. Specifically, analytics used to track cryptocurrency transactions.

According to Coinbase, Neutrino's analytics would allow them to achieve an open financial system where bad actors could be identified and theft prevented. 

So where does it all go wrong?

Quickly after the announcement, many took to twitter to add some disturbing details against some of Neutrino's employees. 

The new team members had an affiliation to Hacking Team- an Italian spyware vendor. A spyware company which created surveillance tools used to monitor crime and terrorism. Although, these same tools were also sold to dozens of repressive regimes which then used them against dissidents in their countries, like journalists and activists. 

It doesn't help that the CEO of Neutrino was the ex-COO of Hacking Team.

What's more disturbing is this information was publicly known. In a form of poetic justice, Hacking Team got hacked in 2015 where their long run of unethical practices and human rights abuses was revealed. Including questioning by the United Nations.

Later it would be revealed by the Washington Post, Hacking Team worked with the same Saudi enforcement group that later played a role in the murder of journalist Jamal Khashoggi.

Coinbase has acknowledged it was aware of this information before the acquisition.

Adding more fuel to the fire, Coinbase revealed it hired Neutrino due to their current providers selling users data. And once again, twitter came with the punches as they quickly pointed to their privacy policy: "our contracts require these service providers to only use your information in connection with the services they perform for us, and prohibit them from selling information to anyone else."

Coinbase quickly responded by announcing "those who previously worked at Hacking Team (despite the fact that they have no current affiliation with Hacking Team), will transition out of Coinbase."

Many in the crypto community did not find the response sufficient which led to a growing #deletecoinbase movement. Many were urged to withdraw funds and close their accounts for good. 

This poses an interesting conundrum for the Crypto space: Does Coinbase have an ethics problem? And if so, does it warrant the crypto community to outcast one of the major fiat to crypto on-ramps from the United States?

-Camille