Coinbase, one of the largest exchanges of cryptocurrencies, has recently signed another acquisition agreement with the start of Blockchain technology.
In this way, the exchange has acquired Neutrino, the blockchain analysis startup, as part of a broader effort to offer more diverse cryptography across borders.
Coindesk reported that Coinbase’s Director of Engineering and Product, Varun Srinivasan, said: “This is particularly important as we work with regulators and agencies in different countries to bring new assets there.” He added that Neutrino would help Coinbase identify “which new tokens are gaining value and gaining traction in space.”
The reports stated that Neutrino‘s agreement with Coinbase is an undisclosed acquisition. Under the agreement, this week, eight Neutrino employees will move to the Coinbase office in London, retaining their distinction as a separate entity to continue serving external clients.
Based in Italy, Neutrino helps map Blockchain networks, and in particular cryptographic token transactions, to obtain information and knowledge.
With the increase in theft, that includes a greater focus on services so that law enforcement agencies can track stolen digital assets, while also including tracking ransomware and analyzing “dark networks.”
Other solutions include tracking services for financial and investment companies to help find increasing tokens and assets, an area in which Coinbase could clearly capitalize as it moves forward after security token offers.
In this way, Srinivasan said that this acquisition will help Coinbase to investigate new assets while ensuring that the exchange of cryptocurrencies can identify undesirable activities, such as theft, without providing internal information to external companies. The finanacial terms of the contract were not disclosed.
“It will also help us provide more cryptocurrencies and functions to more people while helping us ensure compliance with local laws and regulations.”
The move came a few weeks after Israeli blockchain analyst Whitestream identified a Coinbase account that was channeling bitcoin donations to Palestinian political-military group Hamas, which the United States government considers a terrorist organization. Coinbase declined to comment on this incident and Srinivasan said the acquisition of Neutrino was already in process for some time.
Speaking in general terms about the benefits of owning an internal analysis platform, Srinivasan said:
“We are strengthening our skills to comply with standards and work with regulators on issues related to crypto space.”
Neutrino general manager Giancarlo Russo said in a statement that the acquisition was an “important milestone” for innovation in Italy, where it is based, adding:
“We decided to join Coinbase because we are fully aligned with the company’s mission to build an open financial system and we share the same commitment to regulation, compliance and security in the cryptocurrency space.”
As Neutrino is its eleventh acquisition to date, Coinbase has obtained more than $ 500 million from multiple investors. More recently, he has raised $ 300 million in Series E funds, which gave them a boost in his $ 8 billion valuation. Instead of acquiring on the basis of the amount they like, they focus on quality, as they tend to close the deal involving better engineering and skillful support for their expanding business. In fact, in December 2018, Coinbase’s Director of Operations, Asif Hirji, suggested including as many coins as possible in the next year.
Compared to its competitors, such as Whitestream and Chainalysis, Srinivasan said Neutrino’s team was working much faster to include features for cryptocurrencies beyond bitcoin. In addition, Neutrino’s European connections could help Coinbase to gain a foothold in that region.
“They have done a very good job building themselves in the European market,” said Srinivasan. “But we want to take them to the US market and the international market and introduce them to companies that are doing all kinds of things with cryptography that need blockchain intelligence.”
Srinivasan prefers the term “block chain intelligence”, rather than analytical because it includes the objective of predicting trends based on data information, among other applications.
What is Neutrino background?
As soon as Coinbase revealed the acquisition, participants in the cryptocurrency industry immediately sounded the alarm about Neutrino’s roots.
Giancarlo Russo, its CEO, previously worked as COO of HackingTeam, a team based in Milan with a scandalous reputation. Described by Verge as “the first vendors of commercial piracy software to the police,” HackingTeam’s spyware allows customers to participate in a large number of surveillance activities.
These include the covert collection of emails, SMS messages, call history and address book data, as well as the registration of keystrokes, the touch of Skype calls by phone and even data on the use of the wallet of crypto coins.
In another article in the British newspaper The Telegraph in 2015, the company’s founder, David Vincenzetti, confirmed that these capabilities were being sold to governments and other entities in 20 countries.
Social network commentators detected the connection of HackingTeam with the acquisition of Coinbase, while others seemed to catch up quickly.
The ecosystem remains growing
Blockchain analysis is becoming an increasingly important part of the broader cryptocurrency landscape.
As proof of this, Jonathan Levin, co-founder of rival blockchain analysis firm Chainalysis, told CoinDesk that his company is now working with 100 clients across the industry, including exchanges.
It should be mentioned that, Chainalysis raised a Series B of $ 30 million and opened a new office in London, preparing to expand further in the European market now that the Fifth European Union Money Laundering Directive is expected to inspire new requirements of compliance. several countries.
“Our revenues in 2018 quadrupled,” Levin told CoinDesk, declining to specify how much Chainalysis earned.
Coinbase has a significant amount of historical data that could help differentiate Neutrino from younger analytics startups. In general, Srinivasan said that Coinbase is looking to become the “crypto Google” with “many different products” throughout the sector.
Srinivasan also added that several other acquisitions are still underway related to intelligent contracts and the diversification of offers of encryption assets.
“If we see a great team that is building a great product, like Neutrino, for example, they will see us go out and talk to them and try to include them in the Coinbase family to expand the set of products we have,” Srinivasan said.
Earlier this year, Coinbase announced that it had acquired the Blockspring technology startup backed by Andreessen Horowitz. This initiative provides the tools that allow developers to collect and process information automatically from the application programming interfaces.
Clearly Coinbase has decided to increase the products they offer for their customers. In January, the exchange added resources for customers in the United States to claim encryption transactions on their taxes, integrating their systems with the popular TurboTax tax software.
Later, in February, Coinbase launched support for European Union residents to make fiduciary withdrawals to the PayPal online payment system, a feature that was previously released only to US users. UU