In what has already proven to be an extremely challenging 12 months for Coinbase is shows no signs of respite. The crypto exchange’s CTO announced his departure following roughly one year in the spot.
Balaji Srinivasan broke the news on his Twitter account. He also thanked his “friend” Coinbase CEO Brian Armstrong for the opportunity.
1/2 Really enjoyed my time at Coinbase working with my friend @brian_armstrong. The Earn integration was successful and we’ve closed ~$200M in deals for the new Coinbase Earn. Was also my privilege to help with shipping new assets, launching USDC, & getting staking/voting going.
— Balaji S. Srinivasan (@balajis) May 4, 2019
The exit is surprising. Srinivasan originally joined Coinbase following the exchange’s acquisition of Earn.com. Now rebranded as Coinbase Earn, the program allows users to earn extra cryptocurrency by watching educational videos about new coins and tokens and then answering questions via related skill quizzes. It’s been one of the few things going right for Coinbase.
During Srinivasan’s short tenure at Coinbase, the exchange has been busy. They supported the launch of stablecoin USDC, bolstered the number of ERC20 tokens on Coinbase Pro, and expanded staking services on Coinbase Custody, a platform specifically aimed at institutional investors.
Nevertheless, Srinivasan isn’t the first Coinbase executive to depart. Dan Romero, head of Coinbase Institution, announced he was leaving last month. Furthermore, Christine Sandler left to become head of sales and marketing at Fidelity.
Who’s next, Brian Armstrong?
Love or Hate Coinbase…
For many, Coinbase was the first port of entry into cryptocurrency. During the early growth stages and right through the bull run of 2017, it was the primary exchange for a wide swath of new retail investors seeking to purchase cryptocurrencies for the first time.
The simplicity of the exchange and user-friendly interface meant users had strong confidence in the platform. During this time Coinbase listed five cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH) and Ethereum Classic (ETC). The exchange has since expanded to include more coins.
In March, Coinbase announced the acquisition of Neutrino, a blockchain analytics intelligence project. The deal exploded into a massive PR nightmare for the exchange after it was discovered that Neutrino had ties to the scandalous Hacking.com that worked with authoritarian governments. The exchange’s tone-deaf decision to proceed with the purchase of Neutrino didn’t go over well in crypto land. An online movement ‘#DeleteCoinbase spread like wildfire through Twitter and other social media platforms, encouraging Coinbase customers to delete their accounts.
YOU DID WHAT?!?!
And that’s why we should trust the people you choose to do business with?!?! https://t.co/XBb3ncHmxI
— Udi Wertheimer (@udiWertheimer) March 3, 2019
Brian Armstrong acknowledged the mistake, releasing the Neutrino members in question. But the damage was done. There was much disillusionment at how a pillar of the crypto and blockchain world could ignore its moral compass and fail to sense right and wrong.
Back to Basics
The unicorn startup was recently valued at $8 billion, but the future is a lot less clear for Coinbase these days. The reputational damage from the Neutrino fiasco continues to linger, and the exchange is projected to have generated 60% less revenue in 2018 than initially hoped. Bloomberg reported the exchange expected to generate $1.3 billion, but according to a report by Reuters, the actual number was closer $520 million.
Adam Draper, the son of famous venture capitalist Tim Draper, is an early backer of Brian Armstrong’s company. And the exchange has arguably done more to onboard crypto investors than any other company in the space. Maybe it’s time for Coinbase to get back to basics.