Coinbase has closed the account of Gab.com (or Gab.ai, hereafter “Gab”), a purportedly uncensored social media website functionally modelled after Twitter, and also closed the account of Gab’s co-founder Andrew Torba.
As predicted: the on ramps and off ramps (exchanges) are going to start censoring not only companies, but also individuals. @coinbase has now banned both Gab's merchant account and Andrew Torba's personal account.— Gab.com (@getongab) January 4, 2019
Decentralized exchanges are the future. pic.twitter.com/LXkjblrdgu
There was no overt explanation from Coinbase regarding the account closures. Gab has become a well known and controversial platform for its status as a refuge for far-right social-political proponents, including the gunman who slew in cold blood eleven Jewish worshipers in Pittsburgh, Pennsylvania (US) earlier this year. We can presume that this is the reason for the account closures.
Taking this into account Gab boldly claimed that decentralized cryptocurrency exchnages (DEXs) are the future. These allow users to access them via their wallets, and don't require any type of KYC/AML checks to allow users to start trading. A few DEXs already exist, although most have poor trading volumes. Binance, a leading centralized crypto exchange, is looking to launch a decentralized version of its platform in Q1 of this year.
This is notably not the first time Coinbase shut down Gab's account. The first time was in June of last year, and saw the cryptocurrency exchange face the community's backlash. The "free-speech social network" started accepting cryptocurrency payments in December of last year, after being turned down by PayPal.
Social Media - A Public Utility?
Gab bills itself as a non-political and anti-censorship social media platform, an alternative to more mainstream social media websites like Facebook, Twitter, and Youtube (owned by Google), which have all taken down user accounts because of some users’ political beliefs, or otherwise controversial content that users have uploaded.
But even Gab was forced to take content offline last year, however, under pressure from its internet domain provider to remove comments of the founder of the Daily Stormer, a neo-Nazi group. Gab has in fact had much trouble staying online this year, being rejected by host after host, and cut off from fiat payment transfer services like PayPal and Stripe.
Social media has become so vital to societies’ public discourses these days that some would like to classify it as a public utility; and with that classification, there have been calls for government regulation of social media as a public utility.
The big three, all US companies, are grappling with the huge challenge of how (not whether) to police their platforms. Top executives are repeatedly called to Washington to sit on Senate committees, and respond to concerns that foreign governments are influencing the US through social media sites, and to elaborate on the sites’ incentive structures.
The notion of centralized control, which Coinbase has just brandished, clearly strikes at the heart of the cryptoasset industry and community. As one of the largest and oldest actors in the industry, Coinbase’s actions are an important signal of which way the industry will move and how it will grow - and divide.