At Coinbase, Transparency and Security Take Center Stage

Three leaders from the crypto platform discuss privacy, security and the work required to establish trust in the industry.

Written by Robert Schaulis
Published on Mar. 01, 2023
At Coinbase, Transparency and Security Take Center Stage

During every challenging moment in history, there is a time when people search for — and eventually find — the adults in the room.

But the search isn’t always easy. In the world of crypto, old-school financial fraud at select companies has burglarized both customer wallets and the reputation of the digitized industry itself. Splashy headlines of bankruptcy and corruption — combined with blasé quotes from leaders of Voyager and FTX — have created two serious situations for customers: One involving security and the other surrounding transparency.

At Coinbase, a regulated, publicly traded platform that allows investors to buy, sell and store cryptocurrency, the industry’s challenges are being met head-on by a company that seeks to lay a transparent framework for future success. In the process, Coinbase hopes to shine the light for the entire industry to move forward.

“People don’t stop investing for life when there’s a recession,” said Coinbase Chief Information Security Officer Jeff Lunglhofer. “But in the post-FTX world, crypto companies should be focusing on how consumer confidence has been shaken in the midst of that recession. We know it’s our responsibility to continue to be the most trusted CEX in crypto.”

To uphold its reputation of trust, Coinbase is shoring up its privacy and information security programs and working “day and night” to make the company the safest and most secure exchange in service of its customers — and to provide needed transparency in the industry.

Coinbase is also working in collaboration with regulators and policymakers to shape the crypto ecosystem. And it’s setting its platform’s users up for enduring success in the world of distributed finance — because despite the apocalypticism of recent headlines, the trillion dollar crypto market and the services and technologies surrounding crypto won’t be evaporating anytime soon. 

 

A lounge at Coinbase headquarters
Coinbase

 

Joining The Fray

Lunglhofer joined Coinbase in August 2022 from Bank of New York Mellon. A veteran information security professional with a background in traditional finance, Lunglhofer saw an offer from Coinbase as the ideal opportunity to pivot into distributed finance.

“I really see the DeFi space and the Web3 technologies that are rolling out right now as the wave of the future. I think distributed finance is going to increasingly dominate and, in time, overtake traditional finance as it relates to managing liquidity, transfer of funds and centralized currencies,” Lunglhofer said. “I wanted to be involved in what I see as the future of finance, and what better place is there to do that than Coinbase?”

Associate General Counsel, Privacy Stefanie Schiff also joined the Coinbase earlier this year. Schiff was working as the head of regulatory affairs at a blockchain startup when the cryptocurrency exchange platform came calling. Like Lunglhofer, Schiff saw the chance to join Coinbase as an offer too good to refuse. 

“Coinbase is one of the most exciting companies you can work at if you work in the data privacy field,” Schiff said. “There are new laws and regulations coming into effect every day. And Coinbase does a lot of things that I love, including educating crypto users and working with regulators to understand how important privacy is for those users.”

Since February, Schiff has been working to ensure the privacy and data security of Coinbase users. In her role, Schiff is able to marry a commitment to promoting greater economic freedom with the opportunity to protect the privacy of crypto users.

Because while crypto currency has become popular with traditional investors, it also has the capacity to help hundreds of thousands — even millions — of people around the globe. In countries with destabilized currencies, for example, access to Coinbase-backed USD Coin, a “stablecoin” pegged one-to-one to the value of the U.S. dollar, can help protect people’s assets from the effects of skyrocketing inflation.

Additionally, because the recent collapses in crypto have been a result of fraud, and not a failure of the blockchain, Coinbase’s focus on the real, honest applications of the technology is helping the company maximize against them.

 

A mission-based approach

Coinbase’s mission is to “increase economic freedom in the world.” On its website, the company notes: “Societies with greater economic freedom have higher life expectancy and GDP growth, less war and corruption, better treatment of the environment and higher income of their poorest 10 percent.”

 

A Coinbase employee's remote workplace setup
Coinbase

 

“It’s rewarding knowing that they are going to be part of something that could change the way people live their lives,” said Senior Director Seiji Kawanabe.

Kawanabe first joined Coinbase in 2017. In his role as a recruiter, he is tasked with building out the team that will bring Coinbase through the current industry crisis and position the company as an engine of industry in the spring and summer that follow. 

To this end, Coinbase is bringing on leaders like Schiff and Lunglhofer and working on improving its processes, products and services.

“The only thing constant in crypto is change,” Kawanabe said. “The highs and lows of recruiting — from when no one knew us to being the first public crypto company to now facing one of the more stressful economic times after the collapse of FTX — are not for the faint of heart. The key is alignment, transparency and execution within every team in the organization. We are constantly trying to improve the way we work and how we communicate with one another in order to get things done faster. This has led us to marked improvements on our technology and security.”

 

Building During Down Markets

In putting together a well-aligned team and facilitating improvements to Coinbase’s platform, Kawanabe is ultimately working toward making it easier for users to access and employ Coinbase — and to feel safe while doing so. 

“The recent issues in the headlines have enabled us to make improvements on our existing platform,” Kawanabe said. “Two big focus areas are around usability and adoption. We learned very quickly that the easier and more practical the product is to use, the more likely they will be willing to make it part of their everyday life. We’re also taking innovative steps at developing better tools and technologies for Web3 where people gain the ability to own their information and use it in the way they want.”

Ultimately, Schiff and Lunglhofer noted, this is the kind of work that will position Coinbase as an engine of a resurgent crypto marketplace.

“There are companies that close, and people shift away from crypto,” Schiff said. “But those who remain focused improve what we’re doing. During these downturns, you can ask how we can best serve our consumers, how we can educate them and get more people investing in this space so that, when the situation improves, we’re able to hit the ground running and already be propelled in that direction.”

 

The remote workplaces of two Coinbase employees
Coinbase

 

Taking Up the Cause

“We take a ‘missionary,’ not ‘mercenary,’ hiring principle — because this road is long and anything but easy,” Kawanabe said. “With the industry being so new, it’s a small pool we have to fish from for crypto experts. The key is finding people who are passionate about the crypto space and Web3.”

While crypto, like virtually all other forms of investment, has been maligned as a means to make a quick buck — particularly in the case of recent headlines — ultimately Coinbase is looking to build out its team with mission-focused candidates who are passionate about the opportunities inherent in decentralized finance and Web3 technology. The company wants to employ dedicated, hardworking and honest people to help Coinbase continue to be the voice of reason and trust in the industry.

Coinbase doubled the size of its privacy team over the past year, and the company is continuing to expand to new jurisdictions and build out its privacy and information security teams.

“We’re looking for people around the globe to ensure that we have worldwide coverage to stay compliant and nimble and achieve our mission of unlocking economic freedom, while keeping with being the most trusted company in this space,” Schiff said. “In the last few years, privacy has become a focal point for regulators and consumers worldwide. New laws are being implemented constantly, which makes privacy one of the most exciting areas to be in such an evolving industry. We need forward-minded and business-focused leaders who are constantly learning and who are comfortable advocating in the area of changing regulatory landscape.”

Companies like Coinbase are hard at work redoubling consumer confidence and safety efforts — and making sure the industry stabilizes as soon as possible. 

“We’ll continue to strive to always be the most trusted name in crypto,” Lunglhofer said. “That’s core to our mission, and it’s core to our corporate culture and identity. We are the adults in the room.”

 

Responses have been edited for length and clarity. Images provided by Coinbase and Shutterstock.

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