On February 19th, powerhouse U.S. cryptocurrency exchange Coinbase announced its acquisition of Neutrino, a blockchain intelligence play whose enterprise-grade tools for “tracking cryptocurrency flows across multiple blockchains” will now be used for and on America’s largest crypto user base to date.
Originally headquartered in Milan, Italy, Neutrino will shift over its operations to the American exchange’s London office while maintaining its status as an independent enterprise within the Coinbase ecosystem. The exchange’s leadership hailed the move as another step it’s taking to mature and legitimize the cryptoeconomy.
“By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors,” Coinbase’s engineering head Varun Srinivasan said on the news.
“It will also help us bring more cryptocurrencies and features to more people while helping ensure compliance with local laws and regulations. Neutrino’s technology is the best we’ve encountered in this space, and it will play an important role in legitimizing crypto, making it safer and more accessible for people all over the world.”
Cyberscurity & Theft Investigations
Under the Coinbase umbrella, Neutrino’s eight employees will help with cybersecurity and theft investigations, and the startup’s ICO monitoring services may be used as the exchange considers expanding its token offerings. In December 2018, Coinbase declared it was considering as many as 30 new cryptocurrencies to its platform.
Toward the daylight of the mainstream, the buy-up will organize the exchange’s operations and will sit well with U.S. regulators, legislators, and traditional finance players. On the flip side, the more anarchic among the cryptoeconomy’s diehards will see the acquisition as another advancing threat against the privacies afforded by pseudonymous blockchain use.
As the cryptoverse has blossomed, the demand for blockchain analysis services has grown in kind. And as the ecosystem now has its first decade under its belt with possibilities for further growth on the horizon, the demand for these niche intelligence services is reaching a fever pitch. Coinbase reportedly started working on its own proprietary market surveillance system back in 2018.
It’s growing demand that drove the recent $30 million USD Series B fundraising round of Chainalysis, the space’s most high-profile blockchain investigation firm. The company said it was using part of those funds to open up a permanent office in London, so with Chainalysis and Neutrino in town, the U.K. capital looks set to become an international blockchain intelligence hub.
Moreover, the Neutrino acquisition also indicates Coinbase’s pivoting focus to Europe and its crypto centers. As the exchange has built out its London operations, it’s also looked elsewhere in Europe, having announced the opening of an office in Dublin, Ireland, last fall. The company first received a Barclays bank account and an e-money license to operate in the U.K. last spring.
Other Coinbase Acquisitions
Coinbase has continued to expand through acquisitions at a steady pace, regardless of the cryptoeconomy downturn after the 2017 bull run.
This January, the U.S. exchange acquired Californian data collection startup Blockspring, which, like Neutrino, was slotted to remain as an independent company leveraged within the wider Coinbase ecosystem. In 2018, the company went on a purchasing spree, buying up dapp browswer Cipher Browser, crypto earnings play Earn.com, securities dealer Keystone Capital, decentralized exchange Paradex, and digital identity upstart Distributed Systems.
Individually, each of these acquisitions suggests Coinbase isn’t interested in being just a straightforward cryptocurrency exchange. Taken altogether, the buy-ups indicate the exchange is building out the infrastructure for a sprawling brand ecosystem in the years ahead, which will be underpinned though and through by blockchain technology and cryptocurrencies.
And as it builds, Coinbase does so from its war chest. The company raised an impressive $300 million USD in its Series E fundraising round in October 2018.