Details of a contract between Coinbase and US Immigration and Customs Enforcement have surfaced for the first time.
Why it matters
The agreement includes “historic geo-tracking data” not available via public sources.
Leading cryptocurrency exchange Coinbase has a contract to provide US Immigration and Customs Enforcement, or ICE, with data analysis tools to help investigate financial crimes, and one of the features offered is raising some eyebrows.
The deal with ICE was reported last year, but the full documents surfaced this week via a Freedom of Information Act request by watchdog organization Tech Inquiry, which was initially reported by The Intercept on Wednesday.
The services offered from Coinbase Analytics in the contract include a “blockchain explorer,” “multi-hop link analysis for incoming and outgoing funds,” and “transaction demixing and shielded transaction analysis.” (The company now sells this set of tools to public and private customers as Coinbase Tracer.)
Coinbase also includes a public disclaimer for these services, which says it “sources its information from public sources and does not make use of Coinbase user data.”
A number of companies, like Chainalysis and Nansen, provide similar analytics tools that use software to sift through the overwhelming amount of public transaction data on crypto blockchains for everything from performing due diligence or seeking out investment insights to tracking down money launderers and investigating terrorist financing.
But there was one other feature highlighted in the services Coinbase was offering to the federal government that sticks out.
Among the list of included services that ICE agents can now apparently access via a web-based Coinbase Analytics platform is “historical geo-tracking data.”
Most public blockchains don’t access or store geolocation data within transactions, so isn’t clear how Coinbase would be providing this data from public sources.
ICE says the contract complies with all laws, policies and regulations that govern data collection and tracking.
“The contract provides a tool that supplements … capability to investigate traffickers of deadly opioids on the dark web and cyber criminals who seek to attack critical infrastructure,” an ICE spokesperson told me via email. “This tool does not reveal any sensitive personally identifiable information, is only referenced in criminal investigations, and it is not utilized in civil immigration enforcement.”
Coinbase didn’t immediately respond to a request for comment.
On Thursday the company posted a response on Twitter, writing:
“We want to make this incredibly clear: Coinbase does not sell proprietary customer data,” adding, “Coinbase Tracer sources its information from public sources, and does not make use of Coinbase user data. Ever.”
The contract with ICE only covers data across 12 blockchains, including ethereum and all ERC-20 tokens, bitcoin, litecoin, tether, EOS, stellar and ripple. The yearlong contract went into effect last August and runs out on Aug. 9.
The correspondence included in the documentation acquired by TechInquiry.org reveals that the company also invoiced the US Drug Enforcement Administration and the French National Police for similar tools prior to August 2021.