Privacy has been a heated discussion for decades. Recently, legislation has been passed to provide greater protections for consumer data including GDPR, BDSG-New, and CCPA. The age-old question is: “If you aren’t doing anything wrong, why do you need privacy?” The answer isn’t so simple.
Ranging from the mental health impacts of not having privacy to determining what is “wrong” or who decides what is “wrong”, arguments have no bounds on the topic, hence a base-level provision for personal privacy. In acquiring Neutrino, Coinbase is gearing up to strip away privacy from their users, regardless of their intention of use: The people behind Neutrino previously founded one of the world’s first company’s to sell off-the-shelf hacking software to governmental security organizations.
Moreover, both governments and businesses have proven that they cannot responsibly handle the level of power derived from vast surveillance capabilities. Between several recent Facebook data harvesting fiascos, NSA whistleblower scandals like Edward Snowden’s case, and directives issued to violate pre-existing laws, the list of privacy violations and custodial failures goes on.
Coinbase has already seen substantial pressure from government entities to turn over user records, but at the time, they fought the request to a more reasonable level. It makes you wonder what their intentions are moving forward and how they will handle regulatory pressure the next time, especially since Neutrino is remaining a separate business.
Tools created and sold by Marco “NaGa” Valleri and his co-founder “ALoR” have been touted to be more effective at intel collection than the widely scandalous PRISM program. The Hacking Team also reportedly lied to numerous clients about anonymity and backdoor access to some of the systems they built.
Benefits Of Neutrino Tools For Coinbase
To comply with regional KYC/AML requirements, Coinbase went through with the Neutrino acquisition for analyzing blockchain transactions. Neutrino boasts capabilities like cross-chain transaction analysis – a fancy way of saying “follow transactions between blockchain networks.”
But what else can Neutrino do? Why would Coinbase risk their reputation to acquire Neutrino?
XFlow brings multi-blockchain traceability to the table and pairs it with forensic software standard expectations like case management (for law enforcement) and KYC/AML verification for private businesses.
Neutrino’s Co-founders Used to Sell Spyware to Authoritarian Regimes
Now, I said that Neutrino Co-Founders NaGa and ALoR had a bit of a shady past—I meant it. Knowing that they were in Hacking Team doesn’t mean much alone. Their previous venture had a history of selling surveillance software to authoritarian governments such as Ethiopia and Sudan. How can Coinbase expect to integrate this type of technology without evaluating the risk of betraying their customer base, even inadvertently?
Perhaps the most disturbing thing about the duo behind Neutrino is their willingness to tell half-truths and act dishonestly in the face of adversity. When questioned about their systems, NaGa stated the following about their business model [with Hacking Team]:
“Our system works under the principle of ‘customer isolation.'”
The team had watermarked all of the intel capture servers–which directly contradicts the above statement. The team could readily identify the client and their information. They even held a killswitch, much like the BitMain AntBleed exploit. Do you really trust your privacy in the coming economy to individuals who will implement standard operating procedures like this?
For some crypto enthusiasts, the answer is a clear “no.”
The Big Picture
Privacy is a necessary component of human sanity. Even interactions with our most trusted confidants online can be different due to the possibility of being monitored. The next generation, who will experience many everyday social struggles and interactions mostly if not solely online will show us how reduced privacy affects humans.
In order to maintain a base-level of privacy, governments are enacting more stringent privacy protections. Nine states have put forth CCPA-esque bills for consumer privacy protection over the last two months.
Knowing that Neutrino co-founders have a checkered past, Coinbase has already seen the effects of regulatory scrutiny, and Neutrino will retain their status as a mostly independent business, Why would Coinbase buy them? They stand poised to add to the scrutiny they will attract and risk betraying their customers—having the capability to reach into private transactions, regardless of transactional intent is what Coinbase may well have purchased.
Indeed, privacy could likely be majoritively bred out of humans as a species, but should it? Even in Orwellian scenarios, citizens still retain minimal amounts of privacy. I’m curious to see the impacts of distrust on Facebook users with their latest product launch.
This acquisition seems like a good move in terms of crypto adoption, but, if not managed correctly, it could have wide-reaching effects on the development of future projects. Character flaws can be controlled, but if they aren’t, people tend to fall back into what they know best and what is most natural. Don’t be that guy, Coinbase: You’ve already positioned yourself to betray the decentralized spirit of cryptocurrency.
Click here for a real-time bitcoin price chart.
Last modified: March 4, 2021 2:54 PM