Moxie Marlinspike Leaving Signal: What You Need to Know

Signal Founder Steps Down Amid MobileCoin Rise

Moxie Marlinspike, the creator of the widely-used encrypted messaging application Signal, has announced his departure, a decision reportedly contemplated for several months. This announcement was made public via a blog post earlier today.

Connection to MobileCoin

The timing of this transition appears linked to the increasing prominence of MobileCoin, a cryptocurrency venture where Marlinspike served as an early technical advisor.

Last spring, Signal, boasting over 40 million monthly users, initiated testing of an integration with MobileCoin. This cryptocurrency aims to facilitate privacy-focused payments through rapid transactions directly on mobile devices.

Widespread Adoption of MobileCoin

As reported by Wired, a more extensive implementation of this integration occurred in mid-November. Signal quietly enabled all users to send digital payments with a greater degree of privacy than traditional credit card or Bitcoin transactions.

Joshua Goldbard, the founder of MobileCoin, indicated to the publication that this rollout has significantly boosted the cryptocurrency’s adoption rate. He stated that over 100 million devices globally now possess the capability to activate MobileCoin and execute end-to-end encrypted payments in under five seconds.

Accessibility and Investment

Currently, acquiring MobileCoin requires loading a digital wallet, and its availability is limited to a select number of smaller cryptocurrency exchanges, including FTX. U.S. consumers are not yet able to purchase it through these platforms.

However, Goldbard informed Wired that agreements, such as the one with cryptocurrency payment processor Zero Hash, will soon grant U.S. residents access to MobileCoin within the coming months.

Funding and Valuation

MobileCoin’s global expansion has been financially successful. The company secured $66 million in Series B funding last summer, achieving a valuation of $1.066 billion. Sources suggest that a Series C funding round is underway, potentially valuing the company in the “high single-digit billions” of dollars.

Concerns Regarding Signal and MobileCoin

MobileCoin’s growth has sparked debate surrounding Signal and Marlinspike’s involvement. Marlinspike has seemingly attempted to distance himself from MobileCoin.

Some Signal employees expressed concerns last year to reporter Casey Newton, viewing the cryptocurrency integration as a potential risk and an avenue for malicious actors to exploit the platform.

Legal and Regulatory Risks

A significant concern is the potential legal challenges that integrating a privacy coin could pose for Signal. Matt Green, a cryptographer at Johns Hopkins University, cautioned Wired about the possibility of Signal facing “a problematic situation” due to regulatory scrutiny surrounding payment infrastructure.

Precedents with Other Messaging Apps

The intersection of cryptocurrencies and messaging apps has historically attracted regulatory attention. Kik Messenger, after launching its own digital currency called Kin, engaged in a prolonged legal battle with the Securities and Exchange Commission, nearly leading to the company’s collapse.

Telegram, a larger messaging app with over 500 million monthly active users, abandoned its plans for a decentralized cryptocurrency after facing similar challenges from the SEC.

Even Facebook experienced limited success with its cryptocurrency initiatives, leading to the departure of David Marcus, the project’s longtime leader, in November.

Future Outlook

Should David Marcus join MobileCoin, it would not be unexpected. Similarly, Marlinspike’s future involvement remains uncertain.

As of today, neither Goldbard nor Marlinspike have responded to requests for further comment. A source close to Marlinspike confirmed he will not be assuming the role of CEO at MobileCoin and is currently “taking a break.”

Signal’s Leadership Transition

Marlinspike will remain on Signal’s board during the search for a new CEO. Brian Acton, Signal’s executive chair and a co-founder of WhatsApp, will serve as interim CEO during this period.