A not-so-sweet marriage: what happened with Coinbase and Neutrino?

Coinbase crypto exchange expands custodial services in Asia market

In February 2019, Coinbase, the largest US cryptocurrency exchange, acquired blockchain analytics startup, Neutrino. The Italian company was acquired for an undisclosed amount of funds, and even right after the acquisition, Coinbase faced immediate backlash over the move since Neutrino had some suspicious roots in its development as a company and especially in its team.

The CEO of Neutrino, Giancarlo Russo, was a former COO for HackingTeam, a company that reportedly sold “offensive intrusion and surveillance capabilities to governments, law enforcement agencies and corporations.”

However, Coinbase has now announced that Neutrino’s team will be leaving Coinbase, just less than 30 day after the official acquisition.  The CEO of Coinbase, Armstrong, announced the news through a blog post, claiming that the exchange wants to “transition out” the employees of Hacking Team out of Coinbase.

Coinbase’s close work with banking institutions obviously prevents it from onboarding and having the former Hacking Team members on the permanent team. Armstrong commented on the development:

However, we had a gap in our diligence process. 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. 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.

There is no clear explanation as to what will happen and how will this affect Coinbase’s corporate image.

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