The cryptocurrency industry is still so new that there aren’t very many companies that have had the chance to grow “too big to fail.” In fact, startups and exchanges fail all the time; if their absence isn’t completely unnoticed, it’s rare that the collapse of a company deeply affects the infrastructure of the cryptocurrency world.
If there’s one company whose failure could have a significant impact on the cryptocurrency world, however, it’s probably Coinbase.
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The US-based exchange has millions of users–at its height, more than 11.1 million people were registered on Coinbase; currently, that number sits closer to six million. Coinbase has worked as a political advocate for cryptocurrency, an educational tool for new users, and has made every effort to be the most secure and most compliant cryptocurrency exchange in the world. It is seen as the gold standard by many within and without the industry.
Therefore, Coinbase’s recent acquisition of Neutrino, a blockchain intelligence firm with ties to a company that facilitated blatant human rights violations, was particularly shocking. Many users who have been made aware of the acquisition (and Coinbase’s response to its community’s reaction) have joined the #DeleteCoinbase movement.
How serious is this PR disaster for Coinbase? And what are the implications of Coinbase’s response?
Here’s What We Know
The controversy started on February 15th when Coinbase purchased Italian blockchain analytics firm Neutrino.
Coinbase apparently hoped that gaining a greater foothold in blockchain intelligence would contribute to the company’s ability to create a secure, open-source financial system–more specifically, Coinbase believed that Neutrino would help prevent theft, investigate ransomware attacks and hacks, and to detect suspicious transactional activity.
Today we’re announcing Coinbase has acquired Neutrino, a blockchain intelligence platform. Neutrino’s technology is the best we’ve encountered, and will play an important role in legitimizing crypto, making it safer and more accessible for everyone. https://t.co/6gXcRvpEBM
— Coinbase (@coinbase) February 19, 2019
Indeed, those who have their hearts set against Coinbase are unlikely to listen to Ver or anyone else. After all, trust has been broken, and it’s going to be extremely difficult–if not impossible–for Coinbase to earn it back.
The truth is, however, that Coinbase’ user base is so vast and so diverse that most of its users are probably completely oblivious to its latest blunder. While this disaster struck hard within the cryptocurrency community, most of the rest of the world is most likely happily plodding along, and will never know that the #DeleteCoinbase movement ever began.