Coinbase Spymasters? -- An Ethical Consideration of the Neutrino Acquisition

On Feb 19, 2019, Coinbase announced their acquisition of Neutrino, a creator of technology that will help legitimize the crypto space, protecting both individual wallets and fortifying the blockchain.

“Blockchain intelligence is increasingly important in the crypto ecosystem, and is necessary to achieve our mission of bringing the open financial system to the world. By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors. 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.” 1

But there have been some concerns regarding this acquisition. In one sensational tweet, David Morris’s implies that Coinbase should be punished for acquiring Neutrino.

“So, I spent some time looking into @Coinbase’s latest acquisition, Neutrino. What I found, just by reading existing reporting, is insanely dark, and could/deserves to become a massive scandal for Coinbase.” 2

His linked article presents a fair view of the acquisition while still questioning the ethics behind it. If Coinbase appears to be straying from the core beliefs behind the movement that created bitcoin — preserving privacy — it’s worthwhile to investigate further.

There are at least a few concerns that are raised due to the acquisition. Firstly, the technology can be used to hinder privacy, which goes against the cypherpunk ethos. Secondly, the technology has already been used by governments to spy on its citizens — Neutrino’s founders sold it to them. Thirdly, has Coinbase strayed from the ideology behind cryptocurrency?

Long before founding Neutrino, Marco Valleri and Alberto Ornaghi created an open-source software suite that was able to both help secure networks and spy on them.

“Ettercap is a comprehensive suite for man in the middle attacks. It features sniffing of live connections, content filtering on the fly and many other interesting tricks. It supports active and passive dissection of many protocols and includes many features for network and host analysis.” 3

Their technology caught the attention of the local police in Milan, Italy, who wanted to use it to fight crime. Hacking Team, a commercial venture based off of their open-source Ettercap, was born. The software, sold to governments around the world, enabled:

• Covert collections of emails, text messages, phone-call history, and address books
• Keystroke logging
• Uncover search history data and screenshots
• Record audio form phone calls
• Use phones to collect ambient noise and conversations
• Activate phone or computer cameras
• Hijack telephone GPS systems to monitor target’s location 4

Valleri and Ornaghi developed technology that could be used by anyone in the world, facilitating both the preservation of privacy and it’s erosion. According to them, they were creating tools that could help people, and it was not their fault if others used it destructively. After selling a more offensive version of their software to governments, the playing field became tilted. The police could use this technology to prevent crimes, catch murderers and thieves, and to make the world a safer place. But it could also be used nefariously, although Hacking Team had taken steps to prevent this.5 When questioned about the ethical concerns of their technology, Valleri and Ornaghi recognized the dangers but absolved themselves of any wrongdoing.

“Nobel invented dynamite for legal purposes and we all know how the story ended. We develop a tool. We are not responsible for the use the people make of it.” 6

Regardless of whether Valleri and Ornaghi were right that the ethics of the technology lie not in the hands of the inventors but in those who use it, they erred in restricting their innovations to a privileged few. Giving dynamite to a limited group of people is a recipe for disaster, and their software has caused comparable chaos.
Consider the following quote.

“We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence... We know that someone has to write software to defend privacy, and since we can't get privacy unless we all do, we're going to write it. We publish our code so that our fellow [programmers] may practice and play with it. Our code is free for all to use, worldwide. We don't much care if you don't approve of the software we write. We know that software can't be destroyed and that a widely dispersed system can't be shut down.” 7

These are not the words of Valleri and Ornaghi; they are from the concise Cypherpunk’s Manifesto. In order to preserve privacy, a continuous effort to keep up with advancing technology seems necessary. Importantly, is must be freely available for everyone to see, use, and modify. Hacking Team and Neutrino have strayed from this ethos by privatizing their code, making it only available to a few — governments. As nationalists, they saw this as fulfilling their patriotic duty. 8

Instead of limiting the technology to the government, Neutrino has sold themselves to Coinbase, making a clashing of ideologies quite possible. On one hand, Neutrino’s founders gave the sense that they would do anything for their country. On the other, Coinbase sails upon a movement that sought to put everyone on a more equal playing field — but are they actually aligned with the cypherpunks?

As troublesome as this clashing of beliefs may be, it would fade away if the technology were made freely available. Any privatization of technology, be it government or business, bottlenecks progress. Instead of building off of each other’s progress, we stumble and trip over each other, racing to reinvent the wheel.

If there is ethical concern in Hacking Team’s selling technology to the government, then there should be concern with restricting technology with Coinbase — or any company — regardless of whether they acquire Neutrino or not. There is no guarantee that a company will not abuse it, just like we don’t know the extent to which the government has already abused it — their claims of only using it to fight crime are inaccurate. Even if an organization has purely good intentions now, that can change. A new CEO may come in, a decision from the board, or a rogue employee.

The bigger moral question isn’t whether the acquisition of Neutrino is bad because their founders sold technology to the government, it is whether or not society should continue to sequester technology for the privilege of the few instead of the benefit of all.

-David Ring III

References:
1. https://blog.coinbase.com/welcoming-neutrino-to-coinbase-b3f56171850d
2. https://twitter.com/davidzmorris/status/1100483999795949570
3. http://www.ettercap-project.org
4. CYBERWARFARE SOURCEBOOK, A. Kiyuna, p. 169
5. https://arstechnica.com/information-technology/2015/07/hacking-team-may-not-have-had-a-backdoor-but-it-could-kill-client-installs/
6. https://www.linux.com/news/men-behind-ettercapng
7. https://www.activism.net/cypherpunk/manifesto.html
8. https://foreignpolicy.com/2016/04/26/fear-this-man-cyber-warfare-hacking-team-david-vincenzetti/