Tracking the transactions on the Bitcoin blockchain has become extremely common. Regulations in many Western countries mean that exchanges are required to check the wallets that are receiving and sending Bitcoin for any illegal activity. The process is such that wallets that are associated with the dark web can be instantly blocked, preventing further criminal activity. Coinbase has recently signed a new partnership with chain analysis firm Neutrino in an effort to improve its tracking abilities.
How this works if someone innocent happens to buy OTC from a wallet linked to criminal activity is up for debate. Innocent people could be tarred by association. Yet this is the price members of the cryptocurrency industry might have to pay to continue entering the mainstream and to get the required regulation.
Coinbase has recently signed a new partnership with a company called Neutrino. Creating a partnership with a Bitcoin chain analysis firm is nothing new for a big exchange like Coinbase. However, people have reacted poorly to this new partnership.
The criticism stems from a negative view of the CEO of Neutrino, a man by the name of Giancarlo Russo. Russo’s past involved working for HackingTeam, which has been accused of selling “offensive intrusion and surveillance capabilities to governments, law enforcement agencies, and corporations”.
Congrats to Coinbase on the acquisition of chain analysis startup Neutrino!
FYI, the CEO, Giancarlo Russo, was ex-COO of HackingTeam (https://t.co/qyQ6mLU8XE), who sold “offensive intrusion and surveillance capabilities to governments, law enforcement agencies and corporations.” pic.twitter.com/VVza5AjIYa
— Arjun Balaji (@arjunblj) February 19, 2019
For many involved in Bitcoin who are anti-state, such a partnership with governments is akin to blasphemy. The fear from many is that Coinbase has signed up with a company that goes against the ethos of what Bitcoin is and aims to achieve.
weird flex, but ok?
— Meltem Demirors (@Melt_Dem) February 19, 2019
Whilst many prominent Bitcoiners have promised to boycott Coinbase, it is unlikely that many of them were using Coinbase in the first place. Coinbase’s retail market is for the more casual user of Bitcoin anyway. Coinbase is no stranger to criticism from the community. It has previously been accused of being anti-Bitcoin and pro-Ethereum. It also took plenty of time to add SegWit onto its platform to reduce fees.
The new partnership is unlikely to effect Coinbase’s profits any time soon, but it is another step towards being disowned by a large part of the cryptocurrency community.