The executive in charge of blockchain research at Facebook, David Marcus, has resigned from his position on the board of a major cryptocurrency exchange in order to avoid a conflict of interest.
At a time when the trend is people leaving their jobs to find employment in the cryptocurrency industry, this move seems to go against the grain. However, it can be interpreted as confirmation that Facebook is serious about its cryptocurrency-oriented plans.
Said Marcus in his announcement: “Because of the new group I’m setting up at Facebook around Blockchain, I’ve decided it was appropriate for me to resign from the Coinbase board.”
Appropriate to resign
David Marcus has worked at Facebook since August 2014, and his role has been listed as ‘exploring blockchain at Facebook’ since May 2018. He joined the Coinbase board of directors in an advisory capacity in December 2017.
A quick summary of his pre-Facebook career: David Marcus is a computer programmer and entrepreneur. He founded a communications company called GTN Telecom in Geneva in 1996, a “mobile monetization” company called Echovox in 2000, also in Geneva, and a mobile payments company called Zong in California in 2008. Zong was purchased by PayPal in 2011, and Marcus joined the latter as vice president before taking the reins in 2012.
There had been rumours of Facebook buying Coinbase; Marcus’ presence at both was one of the reasons. His departure may signal that the rumours were not founded.
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Conflict of interest
Mark Zuckerberg, founder and CEO of Facebook, announced his company’s interest in blockchain technology in January 2018, ostensibly to “take power from centralized systems and put it back into people’s hands.” This is important for the $524.61 billion business because it has suffered from some image problems after it was discovered to be selling people’s information to a company specialising in targeted, clandestine marketing. This happened despite Zuckerberg’s assurances to users that their information was safe; he was called to testify before Congress in April 2018.
Interestingly, Facebook banned all cryptocurrency-related advertising from appearing on its website shortly after the aforementioned announcement. This was its response to the epidemic of scams, but it was a blow to the legitimate cryptocurrency industry, especially when other major networks followed its example. The ban lasted for six months before being relaxed – this move came shortly after Marcus was sent off on his exploration.
Coinbase is the Californian company that runs the US’ biggest cryptocurrency exchange, Coinbase Pro. This venue has millions of users and handles $132.3 million in cryptocurrency a day, according to coinmarketcap.com, and has been becoming increasingly institutionalised with its political lobbying, acquisitions, and licence applications. In April is valued itself at $8 billion – a small meal for Facebook.
However, Coinbase is not behaving as if is about to be gobbled up. In the second quarter of 2018 alone the company hired more than 60 people to key positions (‘Head of Business Development’,’VP of Financial Planning & Analysis’, ‘Head of Data Engineering’), acquired several companies and invested in twelve others, according to the company’s official blog.
The cryptocurrency industry has been poaching employees from other industries on a fairly widespread basis for over a year now. In this context, Marcus cutting ties with Coinbase implies that Facebook is going to become a cryptocurrency company itself.
One possible hypothesis is that Facebook is planning to become a competitor to Coinbase by opening a cryptocurrency exchange.