Dubai: Coinbase Inc., one of the world’s largest cryptocurrency exchanges, is letting go of staff after the backlash it faced for purchasing a company allegedly linked to the sale of spyware to oppressive regimes.
Citing a gap in the diligence process, co-founder Brian Armstrong wrote in a blog post late Monday that “we did not properly evaluate everything from the perspective of our mission and values as a crypto company,” referring to their purchase of Neutrino, an Italian blockchain analytics firm.
Coinbase announced the purchase of Neutrino on Feb. 19 and soon faced pushback from users. Neutrino’s chief executive officer Giancarlo Russo, chief research officer Marco Valleri, and chief technical officer Alberto Ornaghi were former members of Hacking Team, according to a BreakerMag article.
Hacking Team sold spyware to countries including Kazakhstan, Saudi Arabia, and Sudan, as well as to the US. Federal Bureau of Investigation and Drug Enforcement Administration, according to a report from Motherboard.
“We took some time to dig further into this over the past week,’ said Armstrong, adding that those who previously worked at Hacking Team ‘will transition out of Coinbase.”
A spokesman for Coinbase declined to comment beyond the blog post.
Issues of fraudulent transactions, hacked wallets, and ransomware attacks have constantly circled the cryptocurrency industry. In November a trader was sentenced to 15 months in prison for misappropriating $1.1 million in Bitcoin and Litecoin. Almost $1 billion worth of cryptocurrencies was stolen in the first nine months of last year, according to blockchain security firm CipherTrace.