Crypto Industry

As Coinbase Looks to be the Google of Crypto, Are They Becoming the Bitcoin Mafia?

John McMahon | May 4, 2018 | 7:00 pm
Coinbase
Crypto

As Coinbase Looks to be the Google of Crypto, Are They Becoming the Bitcoin Mafia?

John McMahon | May 4, 2018 | 7:00 pm

Coinbase has made new hires and acquisitions recently with a view to dominating all aspects of the virtual currency space but detractors say they are centralizing what is supposed to be decentralized.

Coinbase is Bulking Up to be the Google of Crypto

San Franciso startup Coinbase may not be the largest cryptocurrency exchange in the world though it is widely regarded to be the most popular. But, as it moves towards including more services through internal development and acquisitions, detractors say that it is going against the unregulated spirit of Bitcoin by attempting to dominate the space.

Their recent hire of Emilie Choi, a mergers and acquisitions specialist fresh from completing eight years as head of corporate development at LinkedIn where she completed over 40 deals, sends a clear message about their intention to expand.

Choi is upfront about her strategy to emulate what Google did in their early days by acquiring talent and products to allow Coinbase to grow in all directions using the technology at hand.

Presently Coinbase’s portfolio offers four main services, it’s original cryptocurrency exchange, GDAX exchange, which is geared for institutional investment, Coinbase Custody, and an open-source browser for Ethereum developers called Toshi. Choi’s intentions are to build on these core businesses by adding services that consumers will find ’delightful’.

The cryptocurrency exchange has made three acquisitions in 2018 including the $100 million buyout of Earn, an email marketing platform that pays out in cryptocurrency when the recipient completes a set task. Days after the buyout, now former CEO of Earn, Balaji Srinivasan was made Coinbase’s first-ever CEO. Choi was quoted in Business Insider as saying:

“We’re the ultimate mullet company: business in the front, party in the back.”

Is There A Coinbase ‘Mafia’?

As Coinbase cherry picks new team members and acquires companies to help them become a one-stop shop for everything cryptocurrency and beyond, in regards to fintech services, some detractors see it’s expansion as the kind of competition crushing methods that monopolies of the early 20th century like U.S. Steel would use.

Early adapters and believers in the core principle of Bitcoin being a currency outside of the system have voiced criticism that one company would be so ‘central’ to so much of the crypto market anathema to the movement.

Spencer Bogart, partner at Blockchain Capital, was quoted alluding to the growth of and influence the cryptocurrency exchange has in the cryptcurrency market today:

“They clearly are supporting this notion of a Coinbase mafia and I don’t think that’s on accident.”

Featured image from Shutterstock.

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