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Reacting to Public Ire, Coinbase Drops Neutrino Execs With Hacking Team Ties

Blaming “a gap in [Coinbase’s] diligence process,” CEO Brian Armstrong writes that Coinbase “did not properly evaluate everything from the perspective of our mission and values as a crypto company.”
Privacy & security - Reacting to Public Ire

After a week of community discontent, cryptocurrency exchange Coinbase has decided to sever its business relationship with Neutrino employees who previously worked at the notorious Italian malware/software provider Hacking Team.

Blaming “a gap in [Coinbase’s] diligence process,” CEO Brian Armstrong writes in a Medium post that Coinbase “did not properly evaluate everything from the perspective of our mission and values as a crypto company.”

“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. We are thankful to the Neutrino team for engaging with us on this outcome.”

Last week, Neutrino’s link to Hacking Team came to light thanks to Twitter commentators like Block Digest’s “Janine.” At least three individuals in Neutrino’s core team (CEO Giancarlo Russo, CRO Marco Valleri and CTO Alberto Ornaghi) had been principal employees of Hacking Team, as well as Luca Guerre, an intern-turned-software-engineer at the company.

Coinbase did not disclose which team members would be let go, so there’s no information to indicate how many other Neutrino employees might be affected by the severance. Armstrong also offered no timeline in his post for when these departures would take place.

Disbanded in 2016, Hacking Team made headlines during its business’ zenith for selling surveillance malware to authoritarian governments. Their software’s use has been implicated in inumerable privacy and human rights abuses, including the death and imprisonment of journalists and civil rights activists.

News of Hacking Team’s abuses spread like wildfire through the community, in part stoked by tenacious media coverage and social media backlash, culminating in a #DeleteCoinbase campaign.

And apparently, this heat was enough for Coinbase to decide to dissolve its connections with the people previously associated with Hacking Team.

Previously, the exchange had defended its acquisition in a blanket statement sent to the press. Coinbase stated that it “does not condone nor will it defend the actions of Hacking Team,” but that it wasimportant for [it] to bring [blockchain analysis services] 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.”

A few days after this response to the situation, Coinbase’s Director of Institutional Sales, Christine Sandler, would tell Cheddar that the need to bring these services in-house to protect data was due to its former blockchain analysis providers monetizing user data, something that is against Coinbase’s privacy policy.

In his post, Armstrong mentions that Neutrino was also acquired because their old providers didn’t support all the assets [the exchange] wanted to have on [its] platform,” so it “examined the players, found that Neutrino had some of the best technology in this area, and decided to acquire them.”