Crypto's Merger Problem and What Can Be Done When M&As Go Wrong

"While we looked hard at the technology and security of the Neutrino product, we did not properly evaluate everything from the perspective of our mission and values as a crypto company."

Brant also told Cointelegraph that determining how a merger might reflect on a company's publicly declared "Values" can be a tricky business, although corporations generally do consider what an acquisition is likely to mean from a marketing perspective.

It therefore seems that Coinbase may have deviated from ordinary company practice in not considering the Neutrino merger "From the perspective of our mission and values as a crypto company," as Brian Anderson put it.

Firstly, where does the blame lie for a mishandled acquisition? And secondly, what can shareholders or stakeholders do in the event of a "Bad" merger affecting a company's subsequent performance?

According to Dan Zimmerman, a senior counsel at Akin Gump, they do have the option of legal action, although this is normally limited - as a practical matter - for serious cases where a decline in share price and company value can be demonstrated as having followed from a merger or acquisition.

"Shareholders do have the option of bringing fiduciary duty claims against a company if a merger goes badly," he said.

If an individual's "Shares" in a company amount only to the crypto tokens of that company, and if such tokens are not considered to be securities, for example, then there isn't much he or she could do under U.S. securities law.

"Shareholders can attempt to prevent an acquisition via an injunction," he said, "But this has to be sought before the acquisition has been completed." Added to this, attempting to prevent an acquisition in a court of law places the burden of proof on the plaintiffs, meaning that this is a viable option only when shareholders have a solid case that a merger would be detrimental to them and the company.

Put differently, the whole concept of mergers may be inherently problematic for the cryptocurrency industry, or at least for the community underlying it, because - as Justin Tabb also explained - crypto has its own distinct set of values that are often incompatible with the values of "Mainstream," non-crypto companies, and that may be violated by a merger with such companies.

When a larger crypto company relies on the good will of its customer base, there's little doubt that this customer base has the power to make it suffer if the company does something it doesn't like.