Coinbase Secures Another Millionaire Deal With the US Government to Let Them Use Its Blockchain Analytics Software
Coinbase and the U.S. Homeland Security have struck a million-dollar deal to allow the U.S. government to use the exchange’s services to analyze American citizens’ data.
According to official documents, The Immigration and Customs Enforcement (ICE) – a branch of the U.S. Homeland Security Dept. dedicated to cross-border crime and illegal immigration – paid Coinbase $1.36 million in licensing fees for Coinbase Analytics software.
Pay to Trace, Pay to Tell
This would be the juiciest contract for Coinbase, which has a long history of collaboration with the U.S. government.
According to the official documents, there is no word on what information will be analyzed or shared by Coinbase. Data from the SAM.gov database assures that the exchange “is the only vendor who can reasonably provide the services required” by the ICE, and the information available to the public will be minimal due to the sensitive nature of the relationship between the ICE and Coinbase.
Previously, Coinbase had inked a deal with the U.S. Secret Service to license its Coinbase Analytics tools. The contract would last until May 2024 and for $183,750 would entitle the Secret Service to use its blockchain forensics tools.
Others interested in using Coinbase’s analytics tools include the Drug Enforcement Administration (DEA) and the Internal Revenue Service (IRS) which also paid Chainalysis $625.000 to develop a tool to deanonymize Monero.
Coinbase and the US Government: A controversial Relationship
Coinbase has received heavy criticism in the past for its collaboration with the U.S. government. Still, its CEO has never regretted its lucrative relationship with law enforcement.
In a previous Twitter thread, Brian Armstrong assured that the creation of this service is actually positive for the growth of his company and that they do not deliver information other than what is already available on the blockchain:
“Have seen a few articles talking about Coinbase Analytics – figured I would share my thoughts on it, since I don’t think it’s particularly newsworthy – and lots of conjecture out there. Blockchain analytics software is essentially just compiling publicly available data that is already out there on the blockchain … There is an existing market for blockchain analytics software, so we sell it to a handful of folks as well.”
Armstrong later deleted it due to the strong wave of negative comments and criticism, but an archived version is still available.
Generally speaking, many privacy purists argue that Coinbase’s interests are contrary to the very philosophy of cryptocurrencies. Others even claim that Coinbase could facilitate the cross-referencing of its KYC data with that of the tools it provides.
Coinbase collect private information about their customers due to AML regulations, track customer transactions before and after exiting Coinbase, and then onsell that private information and public data to law enforcement, all without ethical remorse. OK, it’s “just business”.
— DJ Booth (@djbooth007) July 12, 2020
The exchange maintains that its customers’ data is handled separately from its analytics tool so there is nothing to fear.
OhNoRipple via https://www.ohnocrypto.com/ @Felix Mollen, @Khareem Sudlow