Coinbase Inc. has acquired blockchain tracking startup Neutrino srl for an undisclosed price to expand its blockchain intelligence services.

Founded in 2016, Neutrino offers a platform for analyzing, tracking and investigating blockchain and other virtual currencies.

The company pitches its products to law enforcement and financial companies that wish to track and trace cryptocurrency transactions. Neutrino’s XFlow nSpect, designed for law enforcement, is said to provide advanced, unique features for criminal investigations and intelligence gathering.

Features include the ability to follow the flow of coins and their interaction with exchanges, mixers and other services as well as the ability to see how many coins were collected, identify geographical areas where the ransomware is active and spot cryptocurrency wallets used for consolidating funds and for cashing out.

A similarly named product, XFlow nSight, offers financial compliance support including AML/KYC checks.

“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,” Coinbase Engineering Director Varun Srinivasan said in a blog post. “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,” Srinivasan added.

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

The acquisition is already attracting some controversy thanks to Neutrino Chief Executive Officer Giancarlo Russo having previously been chief operating officer at HackingTeam.

Described by Bitcoinist as the “first police spyware sellers,” HackingTeam provides surveillance services such as the covert collection of emails, SMS messages, call history and address book data, as well as keystroke logging, phone tapping of Skype calls and data about cryptocurrency wallet use.

HackingTeam was itself hacked in 2015 and the attackers released files and tools, including bitcoin tracking software called Money Module.

Coinbase is unlikely to lose many customers over the Neutrino acquisition and its links to HackingTeam, but it may lose some. As one Twitter user wrote, “goodbye @coinbase 💔not interested in having my data, identity, and crypto ownership data served to every government agency on a silver platter.”

Image: Coinbase