Moxie Marlinspike, founder of popular encrypted communications app Signal, announced today in a blog post that he is stepping down in a move he said had been in place for several months.
While the move is unexpected, it comes as no shock to industry watchers who have been watching the rise of MobileCoin, a cryptocurrency startup for which Marlinspike is its first technical advisor.
Last spring, eight-year-old Signal, which has more than 40 million monthly users, began testing integration with MobileCoin, which it says is focused on enabling privacy-protecting payments made through “semi-instant transactions” over the phone. But as Wired reported last week, “a much broader phase of that experiment has been quietly underway since mid-November. That’s when Signal made the same feature available to all of its users without much fanfare, providing the ability to send digital payments much more private than a transaction Credit Card – or Transfer Bitcoin – to Millions of Phones”.
MobileCoin founder Joshua Goldbard told the outlet that the rollout of the cryptocurrency spurred a massive adoption of cryptocurrency, telling Wired that “there are over a hundred million devices on the planet right now that have the ability to power MobileCoin and send end-to-end crypto payments in five seconds or less.” “.
Notably, one needs to load their cryptocurrency wallet first, and as Wired notes, it’s listed for sale on only a few smaller cryptocurrency exchanges, including FTX, and no one has offered it to US consumers yet. (FTX founder and CEO Sam Bankman-Fried is one of several investors in MobileCoin through his quantitative trading company and cryptocurrency liquidity provider Alameda Research.)
Even Americans will have access to the coin soon, though, Goldbard told Wired, referring to recently signed agreements, including with cryptocurrency payment processor Zero Hash, that should allow US residents to purchase MobileCoin within months. The first few of this year.
Meanwhile, the worldwide move has been beneficial for MobileCoin, which last summer raised $66 million in Series B funding at a valuation of $1.066 billion and, according to sources close to the company, is in the process of raising a Series C round with a valuation. Which one source describes as a “billion dollar big single digit”.
MobileCoin’s growth has also raised questions about Signal and about Marlinspike, who has apparently tried to keep his distance from MobileCoin. One obvious reason is to focus on Signal employees, some of whom told reporter Casey Newton last year that they saw Signal’s exploration of the cryptocurrency as too risky and an invitation for bad actors to use the platform.
Probably a bigger, but related, concern to critics is that incorporating a privacy coin could present a legal problem for Signal. As Matt Green, a crypto expert at Johns Hopkins University, told Wired last week, “I’m very nervous that they would put themselves in a problematic situation by courting this kind of payment infrastructure when there is a lot of legislation and regulations around it.”
It’s a valid concern. As we noted earlier, cryptocurrencies and messaging apps have not mixed well historically due to neural regulators. Kik Messenger, the mobile messaging app founded by a group of University of Waterloo students in 2009, created a digital currency called Kin for its users to spend within the platform. The project eventually led to a years-long battle with the Securities and Exchange Commission that nearly wiped out the company. Telegram, a much larger messaging app than Signal — which claims to have more than 500 million monthly active users — has similarly abandoned plans to offer its decentralized cryptocurrency to anyone with a smartphone after years of fighting with the Securities and Exchange Commission.
Even Facebook hasn’t been able to gain much with its crypto venture, as longtime leader of that effort, David Marcus, announced back in November that he was leaving the company.
If Marcus appears at MobileCoin, we wouldn’t be surprised, but we’d be less surprised to see Marlinspike more involved in some capabilities.
Neither Goldbard nor Marlinspike responded to our requests today for more information, but when we asked if Marlinspike might consider taking on MobileCoin as CEO (the company doesn’t have one), a source close to him said he “doesn’t do it” and is now only correct “taking a breather” .
we will see. We don’t promise to eat our shoes if we’re wrong. (this happens!)
For now, Marlinspike writes in his post, he will remain on the Signal board while Signal’s search for a new CEO continues. In the meantime, its CEO, WhatsApp co-founder Brian Acton, will act as the interim CEO of Signal.