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Coinbase wants to reject politics. It should already know how risky that is.

September 30, 2020, 2:33 PM UTC

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Is it possible to be apolitical in today’s America? Coinbase, the largest cryptocurrency exchange in the U.S., is about to find out.

Brian Armstrong, Coinbase’s CEO and cofounder, wrote in a blog post this week that his company would “focus on being the best company we can be, and making progress toward our mission, as compared to broader societal issues.” The post laid out, among other things, clear limits on Coinbase’s corporate charitable efforts and political engagement, and guidelines for employees that include not debating politics internally. Instead, Armstrong wrote, Coinbase will maintain singular focus on creating a blockchain- and crypto-based alternative to the current financial system.

Armstrong is standing athwart recent trends at the highest levels of corporate America. Those are exemplified by efforts by the Business Roundtable group to advance what it calls ‘stakeholder capitalism.’ Stakeholder capitalism is an attempt to walk back ‘shareholder theory’, also known as the Friedman Doctrine, after economist Milton Friedman. Friedman famously argued corporate ethics could be boiled down to one principle: generating money for shareholders.

There is growing consensus, both among the American public and its corporate elite, that adherence to the Friedman Doctrine has had toxic social effects over the past half-century. Because it discourages consideration of the secondary impacts of a corporation’s actions, the doctrine is arguably at the root of phenomena, such as offshoring and contingent labor, which have frayed the social fabric of America and the world.

Armstrong’s call for a focus on Coinbase’s core business is in large part a rejection of stakeholder capitalism and a defense of the Friedman Doctrine. And there are good arguments for that: initiatives like the Business Roundtable’s have yet to show they can produce real change, instead of just good public relations. Because stakeholder capitalism is so often gauzy and pro-forma, it can boil down to empty gestures like handing cash to nonprofits that have their own structural issues.

If you’re trying to change the world, it’s much more durable to do what Armstrong says he wants to do at Coinbase: make money from a product that inherently helps people and society. That’s why Fortune recently named a group of startups to what we call the Impact 20, companies focused on fixing social problems and making money doing it. If you believe that cryptocurrency has benefits for human freedom, Coinbase fits neatly in this group.

All that said, Coinbase has seen firsthand that turning a blind eye to politics can lead to huge business blunders.

In early 2019, Coinbase acquired a company called Neutrino, a so-called blockchain analytics firm developing tools to track and trace transactions in Bitcoin in other cryptocurrencies. This was dicey enough, because many crypto fans are privacy-focused, and would rather such companies didn’t exist at all.

Things got worse fast, though, when critics (including me) highlighted that the executive team at Neutrino had, at a previous company called Hacking Team, provided spy tools to heinous authoritarian regimes, including some engaged in the harassment and even murder of journalists. The head of Hacking Team had also expressed fascist sympathies.

If there’s anything Bitcoiners dislike more than being monitored, it’s overt authoritarianism, and a ferocious outcry ensued, organized around the hashtag #deletecoinbase. Coinbase ultimately fired all former Hacking Team members, likely torching much of the reported $13.5 million spent to acquire Neutrino’s technology and team. Coinbase admitted that in looking at Neutrino, “we did not properly evaluate everything from the perspective of our mission and values as a crypto company.”

This, in a nutshell, is the risk of explicitly silencing internal political dissent at a company. While Coinbase’s executive team didn’t see the risk in the Neutrino acquisition, it seems likely that at least a few of the company’s dyed-in-the-wool crypto-native employees did.

If they’d been heard, it might have saved Coinbase not just several million dollars, but significant reputational damage. Because of Neutrino and similar incidents, many of the most dedicated champions of cryptocurrency now openly disdain Coinbase, which they see as having little real commitment to the values that inspired Bitcoin. In other words, by ignoring politics, Coinbase actually damaged its core mission. But instead of fostering employee input, Coinbase is now going the opposite direction, even offering severance packages to usher dissenting voices out the door.

So, can a company be apolitical in today’s America? It may be appealing in theory. But in practice, an organization with its head in the sand is going to have some trouble navigating our tumultuous times.

David Z. Morris




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This edition of The Ledger was curated by David Z. Morris. Contact him at