Coinbase Suffers Backlash Based on Recent Acquisition

On February 19th, Coinbase announced the acquisition of Neutrino, a blockchain intelligence firm. Since then, the company has received significant pushback from customers who believe Neutrino to be an untrustworthy company.

As a major United States cryptocurrency exchange, Coinbase users expect to be able to have a high degree of trust in the company. If they wanted risk, they would go for a cheaper exchange that had a higher degree of risk involved in the platform.

The Neutrino acquisition is meant to help augment the current Anti-Money Laundering and Know Your Customer technology. The technology is said to be best-in-class and represent a strong strategic move by internalizing those tools.

Neutrino’s Management is in Question

The main issue with Neutrino is senior management and the actions they’ve taken in the past. The co-founders were previously involved in a commercial software firm called Hacking Team, which has been known to work with international governments and enforcement agencies. Hacking Team used to produce spyware to help authoritarian governments spy on their citizens, and has been named one of the top 5 corporate enemies of the Internet.

Since the announcement, a “#DeleteCoinbase” hashtag has gained momentum. The trustless nature of Bitcoin is very important to users and part of what makes it special. As with many of these trends, it is difficult to tell who is following through and who isn’t, but it definitely isn’t getting Coinbase more users.

Coinbase’s Director of Institutional Sales, Christine Sandler, has justified the controversial acquisition with the revelation that the previous client data providers they were using had been selling Coinbase user data to outside sources.

“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.”

This is a wild way to justify the acquisition, since it is technically a scandal in itself. Privacy is a major consideration within the Bitcoin world. Although some investors are just looking for an astronomical return, many of them are also investing with the belief that a more private, censorship resistant coin is the way of the future. If Coinbase essentially compromises this with bad practices, then these customers will not feel safe using them.

Long-Term Implications

The technology may be essential, and it could be possible that senior management and talent has no effect on the way Coinbase will be run in the future, but it is definitely a suspicious, if dubious, choice. Coinbase has said they were aware of these people’s actions, and reviewed as part of their due diligence, but did not foresee to be a problem.

All of this comes as additional controversy arises surrounding Coinbase’s listing of Ripple. XRP has been shown to violate some of Coinbase’s listing parameters by having more than a minority stake held by the team. Ripple holds approximately 60% of the supply, which is another part of the continuing controversy surrounding the coin. Additionally, Coinbase has had to come out and say they do not make decisions for whether Ripple is a security or not, as they “are not securities lawyers”.

eToro
Key Features
Accepts customers from the USA
Award-winning Cryptocurrency trading platform
Wide variety of crypto assets
One of the fastest growing brokers in the world
Min Deposit
$50
United States
Key Features
Accepts customers from the USA
Award-winning Cryptocurrency trading platform
Wide variety of crypto assets
One of the fastest growing brokers in the world
Payment Methods
Wire Transfer, Bank Transfer
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, Crypto, ETF’s, indices and commodities. eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
CEX
Key Features
Margin Trading
Legal compliance
Advanced Reporting
Various Payment options
Min Deposit
$200
United States
Key Features
Margin Trading
Legal compliance
Advanced Reporting
Various Payment options
Payment Methods
Credit Card, Debit Card, Wire Transfer, Cryptocurrencies
Cex.io offers exchange of fiat currency for Bitcoin and Ethereum, as well as Bitcoin/Ethereum trading against the USD.
FOREX.com
Key Features
Trade on popular Crypto markets
Go long or short on cryptos from 10p a point
A trading partner you can trust
Min Deposit
$50
United States
Key Features
Trade on popular Crypto markets
Go long or short on cryptos from 10p a point
A trading partner you can trust
Payment Methods
Debit Card, Bank Wire, ACH, Credit Card, PayPal
Founded in 1999, part of GAIN Capital Holdings. Licensed in highly regulated juristictions, FCA, IIROC, NFA, CFTC, CIMA,FSA. Payment methods ACH, debit card, bank wire transfer. $50 minimum deposit.
Forex trading involves significant risk of loss and is not suitable for all investors.
Bittrex
Key Features
One of the largest cryptocurrency exchanges
High volume across all pairs
Perfect for large and small buyers/sellers
Min Deposit
$1
United States
Key Features
One of the largest cryptocurrency exchanges
High volume across all pairs
Perfect for large and small buyers/sellers
Payment Methods
Credit Card
Bittrex Global has one of the most secure trading platforms and digital holding infrastructures in the world where customers can access exciting new products.
Binance
Key Features
Huge range of cryptocurrencies
Highly liquid
2 Factor Authentication
Min Deposit
$1
United States
Key Features
Huge range of cryptocurrencies
Highly liquid
2 Factor Authentication
Payment Methods
Cryptocurrencies
Binance has grown exponentially since it was founded in 2017 and is now one of, if not the biggest cryptocurrency exchanges on the market.
Coinmama
Key Features
Safe & Secure cryptocurrency exchange
Easy Intuitive interface
Impressive limits
Liquidity Accepted in over 200 countries
Min Deposit
$60
United States
Key Features
Safe & Secure cryptocurrency exchange
Easy Intuitive interface
Impressive limits
Liquidity Accepted in over 200 countries
Payment Methods
Debit Card
Coinmama is a bitcoin broker based in Israel. They specialize in selling bitcoins for credit card to nearly anyone in the world.
Coinbase
Key Features
Trusted provider
Online Wallet
2 Factor Authentication
Beginner friendly
Min Deposit
$1
United States
Key Features
Trusted provider
Online Wallet
2 Factor Authentication
Beginner friendly
Payment Methods
Credit Card, Debit Card, Euro Bank Account, 3d Secure Credit Card
Coinbase is one of the first places that made it easy to buy bitcoin and has since become a widely trusted exchange in the market.

CEX
Margin Trading
Legal compliance
Advanced Reporting
Various Payment options
Start Trading
FOREX.com
Trade on popular Crypto markets
Go long or short on cryptos from 10p a point
A trading partner you can trust
Start Trading
Forex trading involves significant risk of loss and is not suitable for all investors.
Bittrex
One of the largest cryptocurrency exchanges
High volume across all pairs
Perfect for large and small buyers/sellers
Start Trading