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”.

Most Popular

1

Min Deposit

$ 100

User Score

5

CFDs on BTC, ETH, LTC, NEO, XRP, IOTA, EOS, BAB, ADA, TRX, XMR

No need to open a crypto exchange account or use a special wallet

Regulated Broker - FCA, ASIC, CySEC (license number 250/14)

Visit Site more info

Description:

Plus500 is a leading provider of Contracts for Difference (CFDs), delivering Leveraged trading on +2,000 financial instruments, including Forex, Commodities, Indices, Shares, Options and Cryptocurrencies. CySEC license number (#250/14)

Payment Methods:

American Express, Apple Pay, Bank Transfer, Credit Card, Debit Card, Discover, Google Pay, Mastercard, PayPal, SEPA, Trustly, Visa, , skrill

Full Regulations:

ASIC, FCA, FSA, MAS, cysec-250-14-regulator, isa-regulator

82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2

Min Deposit

$ 10

User Score

4.95

Up to $240 bonus!

Build a diversified portfolio with crypto, stocks, and ETFs — all in one place.

Trade on the world's leading social trading and investing platform

Open Account more info

Description:

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.

Payment Methods:

Bank Transfer, Credit Card, Debit Card, PayPal, Wire Transfer

Full Regulations:

CySEC, FCA

3

Min Deposit

$ 0

Promotion

User Score

4.7

No Hidden Fees

Instant Trading

Secure & Transparent

Visit Site more info

Description:

World's longest-standing crypto exchange. Since 2011 Bitstamp has been providing a secure and reliable trading venue to over four million individuals and a range of institutional partners.

Payment Methods:

Apple Pay, Bank Transfer, Credit Card, Debit Card, Google Pay, PayPal

Full Regulations:

4

Min Deposit

$ 1

Promotion

User Score

4.6

0% deposit fees, 0% withdrawal fees, 0% trading commissions

Set up automated trades and up to 50 limit orders with ease

Buy and sell 90+ cryptos and utility tokens, precious metals and national currencies with as little as $1

Visit Site more info

Description:

Create your account in minutes and start trading 90+ cryptos and other assets on the most flexible trading platform.

Payment Methods:

Full Regulations:

5

Min Deposit

$ 50

Promotion

User Score

4.5

Access the world’s most popular Crypto assets including Bitcoin, ETH, LTC, XRP

Automatically copy top-performing Crypto traders

Deposit using PayPal + 9 other deposit options available (not available to US users)

Visit Site more info

Description:

eToro is a multi-asset investment platform with more than 2000 assets, including stocks, ETF’s, indices, commodities and Cryptoassets. eToro offers over 60+ Cryptoassets to invest or invest in their CryptoPortfolio where investors can benefit from the accumulated growth of Bitcoin, Ethereum, XRP, Litecoin and other leading cryptocurrencies. eToro users can connect with, learn from, and copy or get copied by other users.

Payment Methods:

Full Regulations:

Cryptoasset investing is unregulated in most EU countries and the UK. No consumer protection. Your capital is at risk. CFD crypto trading is unavailable for clients residing in the UK and US.

6

Min Deposit

$ 0

Promotion

User Score

4.5

Get insights from millions of investors, creators, and analysts

Build your portfolio of stocks, ETFs, and crypto–all in one place

No minimum deposit

Visit Site more info

Description:

Public is an investing platform that allows you to invest stocks, ETFs, crypto, and alternative assets like fine art and collectibles—all in one place.

Payment Methods:

Bank Wire, Check, Debit Card, Wire Transfer

Full Regulations:

Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Crypto trading on Public platforms is served by Public Crypto LLC and offered through APEX Crypto. Please ensure that you fully understand the risks involved before trading.

7

Min Deposit

-

Promotion

User Score

4.45

Sign Up Bonuses

App Available

Supports Multiple Altcoins

Visit Site more info

Description:

KuCoin is a global cryptocurrency exchange for numerous digital assets and cryptocurrencies. Launched in September 2017, KuCoin has grown into one of the most popular crypto exchanges and already has over 5 million registered users from 200+ countries and regions. According to Alexa traffic ranking, KuCoin’s monthly unique visit ranks the top 5 globally.

Payment Methods:

AdvCash, American Express, Apple Pay, Bank Transfer, Banxa, Credit Card, Debit Card, Discover, Mastercard, Payeer, Perfect Money, SEPA, Simplex, WebMoney, neteller, , , , , skrill

Full Regulations: