Peter McCormack, host of the What Bitcoin Did and Defiance podcasts, is becoming one of the better-known people in the cryptocurrency community.
Like many others, he’s had his fair share of adventures, making and losing a fortune before consolidating his place in the space, learning (the hard way) the meaning of financial sovereignty. He’s also ever outspoken and not one to shy away from giving his opinion.
If you haven’t heard his podcasts yet, his interviews are among the most in-depth and thought-provoking in the industry. He’s had countless influencers and leading players on his show from Erik Voorhees to Andreas Antonopoulos and Caitlin Long.
Perhaps what’s even more interesting about his work is that you can actually hear him learning as he goes at the same time as educating his audience.
Despite being sued by Craig Wright earlier this year for continually negating his claim of being Satoshi Nakamoto, McCormack never misses a chance to speak out against him. He’s called him a “liar’ and a “fraud” many times on social media and repeatedly stands up for what he believes in, regardless of the cost.
https://twitter.com/PeterMcCormack/status/1184419782667292672
Today, despite mentioning that he should probably “watch my mouth for obvious reasons”, McCormack felt compelled to reply to Coinbase CEO Brian Armstrong about the new Coinbase employee manual. Why? Because ‘economic freedom’ isn’t just a headline you can use to feel good.
https://twitter.com/PeterMcCormack/status/1186545590215303168
What is McCormack trying to say?
It should probably be noted that Peter McCormack’s main show sponsor is rival exchange Kraken. He isn’t entirely against intermediaries in Bitcoin it seems. His particular issue with Armstrong’s employee manual goes deeper than the fact that the company is “co-opting the Bitcoin vision without delivering on it”.
Most notably, submitting users to KYC checks, censorship and account freezes, and a disastrous partnership with intelligence firm Neutrino.
When asked for further comment, McCormack told Coin Rivet:
“I don’t have a beef with Coinbase, I actually respect a lot of what they have done for the industry but as they leave their Bitcoin roots for fintech pastures, I find it disingenuous that they claim to be about economic freedom while repackaging financial surveillance and de-platforming customers”.
Censoring and closing accounts
The giant exchange is many people’s first port of call when they start to buy cryptocurrency. Coinbase used to be known as a relatively safe and easy place to on-ramp laypeople into crypto. However, it’s starting to become a lot less likeable within the community and not only for its high fees.
The company caused a stir in January of this year when it began to censor merchant accounts. This appeared to start with the merchant account of Andrew Torba, the social media platform Gab’s founder. The company has also racked up complaint after complaint about closing down people’s accounts.
To be fair, Coinbase has to comply with some pretty hefty legislation in the US as well as censorship laws. This, among many other reasons, is why the majority of exchanges refuse to deal with US customers.
However, as McCormack points out, other exchanges aren’t touting the virtues of economic freedom while simultaneously subjecting users to KYC, frozen accounts, and censorship.
The Coinbase/Neutrino partnership
Soon after the news of Coinbase censoring accounts came out, the company entered into a partnership with Neutrino intelligence firm. They did this in order to have the best technology at their fingertips to track Bitcoin transactions and prevent criminal activity.
However, it turned out that some of Neutrino’s team members were part of the controversial HackingTeam -a company that sells offensive intrusion and surveillance capabilities to governments and with questionable human rights principals.
Congrats to Coinbase on the acquisition of chain analysis startup Neutrino!
FYI, the CEO, Giancarlo Russo, was ex-COO of HackingTeam (https://t.co/qyQ6mLU8XE), who sold "offensive intrusion and surveillance capabilities to governments, law enforcement agencies and corporations." pic.twitter.com/VVza5AjIYa
— Arjun Balaji (@arjunblj) February 19, 2019
This lead to a huge anti-Coinbase backlash and a campaign to #DeleteCoinbase on social media.
weird flex, but ok?
goodbye @coinbase 💔not interested in having my data, identity, and crypto ownership data served to every government agency on a silver platter. https://t.co/13iQ20evnk
— Meltem Demirors (@Melt_Dem) February 19, 2019
The firestorm surrounding the partnership reached such heights that Coinbase finally decided to end their relationship with Neutrino:
“We sometimes need to make practical tradeoffs to run a modern, regulated exchange, but we did not make the right tradeoff in this specific case”.
Summing it up
Whatever your stance on cryptocurrency exchanges, whether you consider them necessary to on-ramp new users or you believe they fly in the face of Bitcoin’s vision, you have to admit “providing economic freedom for every person and business” may be a little far-fetched. Coinbase may be many things. But decentralised, peer to peer, and anonymous are not among them.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.