This article was published on January 11, 2022

Signal’s CEO steps down as questions about its privacy-first image loom large

Brian Acton is the interim CEO


Signal’s CEO steps down as questions about its privacy-first image loom large
Ivan Mehta
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Ivan Mehta

Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That's one heck of a mixed bag. He likes to say "Bleh." Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That's one heck of a mixed bag. He likes to say "Bleh."

Moxie Marlinspike, Signal’s founder, has announced he’s stepping down as the CEO of the company.  In a blog post, he said that he’s now “very comfortable replacing myself as CEO based on the team we have”.

While the company hunts for the new CEO, WhatsApp co-founder, and Signal Foundation board member, Brian Acton will take an interim role.

Moxie_Marlinspike
Signal founder Moxie Marlinspike (credit: Wikimedia Commons)

In this story, we’ll trace Signal’s journey to the present day, and the road ahead as it looks to sustain itself.

Marlinspike launched Signal as a merged app from RedPhone encrypted voice calling app and the TextSecure encrypted texting app in 2015. Over the years, it has gained popularity as one of the most private chat platforms with end-to-end encryption.

Signal is now an amazing group of 30 people: a mix of wonderful engineers, super talented designers, gifted and unflappable support staff, and a very accomplished and committed leadership team. I rarely write code anymore, and if I do it’s in a minor role.

The cryptographer is leaving Signal at a volatile time. It’s trying to raise money to keep the lights on, but some of the routes it’s trying out go against its privacy-first ethos.

Mobilecoin and Signal’s survival

While most chat apps offer their base service for free, they need money to fund their operations. Some get gobbled up by megacorporations for billions of dollars, while others have to find different ways.

Last year, apart from raising $1 billion in funding, Telegram introduced limited ads on its platform to keep the money trickling in. Plus, it might introduce premium stickers and other add-ons in the future.

Signal’s story is slightly different. Acton invested $50 million in the Signal foundation in 2018. Besides that, Signal runs on donations; last year, it introduced the Signal Sustainers subscription program to raise more money.

Singal has a disappearing messages feature
Singal has a disappearing messages feature

While it needs to raise more money, Signal launched a new feature: secure mobile payments. Last April, it started a peer-to-peer payment test in the UK using MobileCoin cryptocurrency, which is backed by Marlinspike. Now, the feature has been rolled out to all users.

MobileCoin was founded in 2017, and has raised more than $100 million in funding so far. When Signal launched its experiment, Marlinspike told Wired, “I would like to get to a world where not only can you feel that when you talk to your therapist over Signal, but also when you pay your therapist for the session over Signal.”

WhatsApp co-founder Brian Acton will be Signal's interim CEO
WhatsApp co-founder Brian Acton will be Signal’s interim CEO (Credit: The Signal Foundation)

That sounds great on paper, because of the inherent volatility of cryptocurrencies’ value, it becomes hard to adopt that feature. Imagine trying to pay your therapist $100 through MobileCoin, and then realizing the currency you’ve transferred is worth only $70. In just the last month, MobileCoin’s value plummeted by 37.5%.

There are also questions about the cryptocurrency’s privacy and its weird internet radio project (please look at it). As journalist Casey Newton pointed out in his Platformer newsletter, Signal employees have concerns about adopting this coin as it might invite anonymous criminal transactions. He added that the coin, which can’t be bought from the US, lacks KYC (Know Your Customer) features that can hold help identify users, and hold people accountable in case of unlawful use of the currency.

Newton also wrote about internal concerns about potential problems — like becoming a communication hub for criminals — that Signal might have to face with growth.

Communication apps like Signal are already feeling the pressure from governments worldwide that want to be able to surveil these networks for law enforcement and national security reasons. Introducing a cryptocurrency will likely add to that burden, and even raise doubts in the minds of the apps’ staunchest advocates as to whether they’ll be able to continue protecting users’ privacy.

As for Marlinspike, what’s next? Maybe web3-flavored, perhaps?

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