Coinbase’s Neutrino acquisition is raising questions

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Coinbase is in murky waters after Christine Sandlers, Coinbase’s head of sales told the Neutrino acquisition was after it found that their current tracking providers were selling customer data to outsiders. Neutrino is an analytics firm that tracks public blockchain data.

NEUTRINO DISQUALIFIED, KRAKEN CEO

Kraken CEO, Jesse Powell, tweeted that Kraken’s compliance team gave Neutrino a bad review.

I asked our Compliance team what they thought of Neutrino. Fortunately, they’d just completed an evaluation. Neutrino came in last place on product (out of the 5) but was disqualified anyway due to the risks. However, other factors are important in M&A: cost, culture fit. pic.twitter.com/kiYh11GEBc

— Jesse Powell (@jespow) March 3, 2019

Following the acquisition of the blockchain analytics firm by Coinbase, media linked Neutrino with an intelligence firm which sold spyware tools to government agencies worldwide. Apparently, Neutrino’s CEO, Giancarlo Russo, CRO Marco Valleri and CTO Alberto Ornaghi were executives, who were part of a hacking team, at the intelligence firm.

Allegedly, the spyware tools built by the firm were used to target journalists and netizens and also to commit human rights violations.

As the ties of Neutrino to the intelligence firm spread across the crypto community, many pointed fingers at the exchange. However, Coinbase justified its stance by saying that it is “aware that Neutrino’s co-founders previously worked at Hacking Team, which we reviewed as part of our security, technical, and hiring diligence.”

“Coinbase does not condone nor will it defend the actions of Hacking Team. It was important for Coinbase to bring this function 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,” added the exchange.

MORE TROUBLE!

Neutrino acquisition is dragging the exchange deeper into trouble. Christine Sandlers, Coinbase’s head of sales, in an interview with Cheddar revealed that it had to migrate to Neutrino because the exchange’s current tracking provider was found to be selling client data to third parties.

“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,” said Sandler.

Coinbase seems to have refused a data breacher only to have chosen another provider who has previous experience in spying on people!