To tackle the rising controversies with Neutrino acquisition, Coinbase has decided to transition out the blockchain analytics firm’s former staffs from their new roles at the crypto exchange who had prior connections to Hacking Team.
The San Francisco-based crypto exchange acquired the Italian blockchain analytics firm in February. As a part of the acquisition, Coinbase poached the entire team of the Italy-based blockchain firm, and the eight former employees of the startup took up new roles at the exchange’s London office.
However, soon after the announcement, the exchange started to face a massive backlash from the community given the background of the co-founders of Neutrino.
As FortuneZ reported earlier, all three co-founders of the company – Giancarlo Russo, Marco Valleri, and Alberto Ornaghi – were previously affiliated with the controversial software company Hacking Team whose spyware products had reportedly been used by a number of international governments and law enforcement agencies including authoritarian regimes.
This even ignited a massive campaign against the US’ leading crypto exchange on social media platforms with the circulation of hashtag #DeleteCoinbase.
On a March 5 blog post, Brian Armstrong, co-founder and CEO of Coinbase, has admitted that there was a “gap” in the exchange’s due diligence process while in the process of the acquisition.
“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 noted. “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.”
An Eleventh Hour Deal
Ahead of the announcement of this decision by Coinbase, its director of institutional sales Christine Sandler addressed the issue while recently talking to the financial news outlet Cheddar. She stressed on the importance of the acquisition citing that the exchange’s previous data providing partner was selling user data to “outside sources.”
She also made it clear that the exchange was “aware of the backgrounds of some of the folks that were involved in Neutrino.”
Armstrong, however, did not mention anything about the data leak.
“Until recently, we worked with several outside vendors that provide blockchain analytics, as most exchanges do. However, they didn’t support all the assets we wanted to have on our platform, so we knew at some point that we would need to bring this capability in house,” the CEO added.