After a wave of opposition from the cryptocurrency community, Coinbase CEO Brian Armstrong announced in a blog post on Monday that some of the leaders of the newly acquired blockchain analytics firm will be “resigning from Coinbase.” Reason for the outcry: those executives are former employees of HackingTeam, an Italian company that provides offensive hacking tools to law enforcement and intelligence organizations—including those of Saudi Arabia, Sudan, and other countries that have poor human rights record. One piece of HackingTeam’s malware, called Pegasus by mobile security researchers, was linked to surveillance targeting United Arab Emirates dissident Ahmed Mansoor — an Emirati blogger who has been arrested several times in the UAE and that he is still in prison.
Coinbase has received the company in question-Neutrino— on February 19. Neutrino’s technology maps the blockchain network, allowing the tracking of transactions, an important power for both potential customers and law enforcement agencies, and one that will allow Coinbase’s cryptocurrency exchange to integrate with more traditional finance.
“Our mission as a company is to create an open financial system for the world,” Armstrong said in his blog post. “To do this, the first step is to empower as many people as possible to access cryptocurrency. Since most of the currencies in the world are tied to the traditional trading system, this means that we need to connect to the system and be in compliance with all rules and regulations as a financial service business.”
The addition of Neutrino will help Coinbase implement a “know-your-customer (KYC) and anti-money-laundering (AML) program,” he said, which will rely on analytics.
But along with the acquisition, Coinbase also acquired Neutrino CEO Giancarlo Russo, Chief Technology Officer Alberto Ornaghi, and Chief Research Officer Marco Valleri. All three previously worked for HackingTeam.
Russo was HackingTeam’s CFO and then CEO, joining the exploit vendor from Ernst & Young in 2009. Russo was linked to the sale of HackingTeam’s Remote Control System software to Russia’s Federal Security Service through emails published by WikiLeaks in 2015-emails revealed by hacking HackingTeam. Ornaghi, who started at HackingTeam in 2008, rose from a development role to become HackingTeam’s CTO in 2015. Marco Valleri worked for HackingTeam starting in 2004, listing his title on LinkedIn as “Jedi.”
Follow the money
The transition from working for cyber-services-for-hire to a blockchain security business is not what it might seem. Daniel Wolfford, former director of threat intelligence at DarkMatter, moved into the cryptocurrency cybersecurity world in 2017; He is now the director of cybersecurity Blockchains in Sparks, Nevada. “There are many overlapping topics between cybersecurity and cryptocurrency,” Wolfford said in a response to Ars on Twitter. “Ransomware is the most obvious example.”
The skills taken from HackingTeam may have been a good fit for tracking blockchain networks, but HackingTeam’s history drew exile from members of the cryptocurrency community. A campaign to boycott Coinbase recently arose on Twitter, and there was controversy was picked up by the blockchain-focused news site BreakerMag.
While a Coinbase representative sent BreakerMag a statement that the company had reviewed Neutrino’s connections to HackingTeam as part of its due process, Anderson said in his blog post that “we have a gap in our due diligence process. While that we consider hard in technology and security. of the Neutrino product, we do not examine everything properly from the perspective of our mission and values as a crypto company.
As a result of the review of the impact of the acquisition, Armstrong said that the managers of Coinbase “together with the Neutrino group have come to an agreement: those who have previously worked in Hacking Team (although it is clear that they are not currently affiliated with Hacking Team). ), will switch from Coinbase.”