Coinbase Exec on Controversial Neutrino Acquisition, Adding Support for Ripple’s XRP

Cheddar
March 1, 2019
Updated 17d ago

By Tanaya Macheel

A Coinbase executive told Cheddar exclusively Friday that the company is looking into its now-controversial acquisition of the blockchain intelligence firm Neutrino, adding that Coinbase’s priority is on the technology rather than the talent.

"We are aware of the backgrounds of some of the folks that were involved in Neutrino and we are looking into that,” said Christine Sandler, Coinbase’s head of sales. "The compelling reason for making the acquisition was that Neutrino had some really industry leading and best-in-class technology.”

Coinbase has been on an acquisition spree for the last year, but the news of its most recent acquisition of blockchain intelligence company Neutrino, which it announced in mid-February, sparked controversy due to its founders’ prior involvement in an intelligence firm called Hacking Team.

Hacking Team was caught selling surveillance software to governments with shady human rights records. This week, the hashtag #DeleteCoinbase began circulating on social media as protesters encouraged others to delete their Coinbase accounts.

“It was important for us to migrate away from our current providers,” Sandler said when asked about why Coinbase bought Neutrino. "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."

Coinbase is also in the spotlight this week for adding support for Ripple’s XRP cryptocurrency, after years of leaving the world’s third-largest cryptocurrency by market cap off its platforms.

Whether or not XRP is a security is a heated debate that has weighed heavy on Ripple, the company behind XRP, for years. Even if the Securities and Exchange Commission does ultimately classify XRP as a security, Sandler said Coinbase is prepared thanks to its recent acquisition of broker-dealer Keystone, which gives Coinbase the green light to buy and sell securities.

"There had been a groundswell of interest in adding the asset to the platform,” she said. “There was some speculation about whether the asset would be classified as a security or not — we’re not securities lawyers. We felt there were compelling arguments on either side."

For the full interview, click here.