Coinbase acquires crypto start-up

on Apr 17, 2018

Coinbase, the largest US cryptocurrency exchange, has acquired blockchain start-up, which operates a social media service that allows users to complete tasks in exchange for cryptocurrency rewards.

Coinbase announced the acquisition yesterday in a blog post that also revealed that, as part of the deal, co-founder and chief executive officer Balaji Srinivasan would be appointed as Coinbase’s first chief technology officer (CTO). The company also said that it intended to continue the development of Earn’s existing business.

“Earn allows senders to pay users in cryptocurrency to reply to emails and complete tasks. We’re going to be doubling down on the Earn business within Coinbase, as they have built a paid email product that is arguably one of the earliest practical blockchain applications to achieve meaningful traction,” Coinbase’s CEO Brian Armstrong wrote yesterday.

While the financial terms of the acquisition haven’t been disclosed, media reports have suggested that the deal is worth slightly more than $100 million.

Earn started out in early 2013 as a bitcoin mining company named 21 Inc. Last October it completed a strategic shift, by rebranding itself and launching the aforementioned social media service that now forms the core of its current business. According to Srinivasan, this move allowed the company to turn around what had become an unprofitable business.

The news about the acquisition comes just days after Coinbase announced that it had acquired mobile ethereum wallet Cipher Browser, which also offers a Web 3 decentralized app (Dapp) browser. Rachel Horwitz, Coinbase’s vice president for communications, said in the announcement of that deal on Friday that the company was “always looking to acquire the best teams and technologies in the crypto spaces”. It was further revealed that Cipher Browser would merge many of its features with Toshi, a decentralised mobile browser launched by Coinbase developers.