‘Shame on You, Moxie Marlinspike’—Fake Cash Scheme Pollutes Signal Nonprofit

Creator of the Signal encrypted messaging app, Moxie Marlinspike (pictured), is suddenly stepping down as CEO of Signal. So suddenly, in fact, that there’s no succession plan in place—the foundation’s co-founder will step in for now.

Some observers are confused and angry over Marlinspike’s latest side-hustle. The pseudonymous cryptographer was a widely respected developer. But a growing chorus of critics now see things differently.

The Signal app is forcing imaginary money onto its users, with Marlinspike suspected to be a big beneficiary. The fake cash in question being MobileCoin, the price of which grew around 10 times when the linkup was announced (although it later fell back to double the price). Not long after, the funny-money startup was valued at a faintly ridiculous one billion dollars—and the latest valuation is said to be five to 10 times that much.

Are the critics fair? You decide: In today’s SB Blogwatch, we weigh both sides.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: Don’t look at Ashe like that.

Follow the Funny Money

What’s the craic? Hannah Murphy reports—“Encrypted messaging app Signal’s chief executive steps down”:

Raised concerns
Moxie Marlinspike said he had decided it was a “good time to replace” himself as chief executive after nearly a decade in the role. … Marlinspike will remain on Signal’s board. … Brian Acton, who co-founded WhatsApp in 2009, has “volunteered” to take over as interim chief executive while the group continues its candidate search.

Acton … sold WhatsApp to Facebook in 2014 for $22 [billion]. He left the company in 2018 following tensions with Facebook founder Mark Zuckerberg over user privacy. … He has since become an ardent critic of the sprawling social media platform, popularising the hashtag #DeleteFacebook.

[Signal’s] mainstream appeal grew in early 2021, particularly when WhatsApp spooked users by changing its privacy policies. … Nevertheless, the organisation’s recent decision to integrate an untraceable cryptocurrency … into the app to facilitate anonymous peer-to-peer payments has raised concerns.

But why? And what next for Moxie? Connie Loizos fills in the blanks—Moxie Marlinspike is leaving Signal”:

Legal headaches
While unexpected, the move seems tied in some way to the rise of MobileCoin, a cryptocurrency startup that counts Marlinspike as its earliest technical advisor. … Last spring, eight-year-old Signal, which has more than 40 million monthly users, began testing out an integration with MobileCoin.

MobileCoin founder Joshua Goldbard [said] the rollout has spurred massive adoption of the cryptocurrency. … Going worldwide has been good for MobileCoin, which last summer raised $66 million in Series B funding at a $1.066 billion valuation and, according to sources close to the company, is in the process of raising a Series C round … at a valuation that one source describes as “in the high single-digit billions.”

[One] concern of critics is that integrating a privacy coin could cause legal headaches for Signal. … Cryptocurrencies and messaging apps haven’t historically mixed well owing to nervous regulators. … Telegram, a much bigger messaging app than Signal … abandoned plans to offer its own decentralized cryptocurrency to anyone with a smartphone after years of battling with … the Securities and Exchange Commission.

Wait, I thought Moxie was against crypto-bros? Thomas Claburn can’t figure it out—“Departure comes as app courts controversy”:

MobileCoin [is] a cryptocurrency that purportedly offers private digital transactions – it works off an encrypted blockchain as opposed to a public blockchain.

The organization’s decision to integrate MobileCoin … has been controversial, and isn’t easily reconciled with Marlinspike’s recent well-received critique of … DeFi (decentralized finance), NFTs (non-fungible tokens), and associated cryptocurrencies. Nor does it fit easily with the notion that Signal is run by a non-profit.

First, let’s eliminate the pachyderm in the parlour. Here’s Sir Arthur Streeb-Greebling:

“Moxie Marlinspike”? Sounds like a Groucho Marx character.

Luckily, we have people such as BeerFartMoron to enlighten us:

Marlinspike was born Matthew Rosenfeld, but he’s been Moxie Marlinspike for as long as I can recall (20+ years).

So, farewell, Mister Marlinspike. frisco feels for Signal’s employees:

I just hope that Moxie’s replacement is someone with as strong a reputation for fighting for the principles at stake and the ability to defend them. … The hidden pressures on Signal staff must be enormous, as likely the world’s single most valuable surveillance target.

Shed a tear? This Anonymous Coward is a well-wisher:

I wish him well. I met him a few years ago in Switzerland, and he’s about the only American in cryptography I’d trust to write code you can rely on.

But ctilsie242 sounds a warning:

I started using Signal back in the TextSecure/RedPhone days because it worked well, and was a solid way to send texts on Android with end to end encryption. To boot, it worked well as a replacement SMS application, storing all SMS history encrypted.

It needs to stick to what it does well, and provide solid authentication for phone numbers, and from there, solid E2EE, with no backdoors or giving users a carnival-esque shell game of what stuff is encrypted, what isn’t, and what gets sold to third parties. Right now, if I’m in a conversation with someone, I know there is a good chance that outside of a nation-state, that conversation will just be between us. … As long as they keep end to end encryption and don’t try to sell the contents of the messages to third parties.

What’s that itchy feeling in my scalp? PragmaticPulp seconds that emotion:

Adding MobileCoin to Signal really changed my perceptions about just how principled the Signal foundation really is. I have a lot of respect for much of Moxie’s work, but the MobileCoin thing is still a head-scratcher.

The penultimate word must go to Pascal Monett:

Shame on you
I am severely disappointed. … I had the utmost respect for him. He was really championing our privacy, and I felt that that deserved all the recognition.

Now he thinks his work is done, and the last thing he does is foist a funny money ecology-destroying scheme on us? Shame on you, Marlinspike.

Meanwhile, did he jump, or was he pushed? Swampash presumes a presumption:

I presume someone finally had the balls to point out that having the CEO of the product be the guy behind the cryptocurrency that just got built into the product over user objections was just asking for government regulation.

And Finally:

Douglby’s return to form

Previously in And Finally

You have been reading SB Blogwatch by Richi Jennings. Richi curates the best bloggy bits, finest forums, and weirdest websites … so you don’t have to. Hate mail may be directed to @RiCHi or [email protected]. Ask your doctor before reading. Your mileage may vary. E&OE. 30.

Image sauce: Steve Jennings—no relation (cc:by)

Richi Jennings

Richi Jennings is a foolish independent industry analyst, editor, and content strategist. A former developer and marketer, he’s also written or edited for Computerworld, Microsoft, Cisco, Micro Focus, HashiCorp, Ferris Research, Osterman Research, Orthogonal Thinking, Native Trust, Elgan Media, Petri, Cyren, Agari, Webroot, HP, HPE, NetApp on Forbes and CIO.com. Bizarrely, his ridiculous work has even won awards from the American Society of Business Publication Editors, ABM/Jesse H. Neal, and B2B Magazine.

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