https://theintercept.com/2022/06/29/crypto-coinbase-tracer-ice/ The Intercept_ * English * Portugues [ ] [FLI-black] (c) First Look Institute A division of First Look Institute * Terms of use * Privacy The Intercept_ Monitors display Coinbase signage during the company's initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Wednesday, April 14, 2021. Coinbase Global Inc., the largest U.S. cryptocurrency exchange, is set to debut on Wednesday through a direct listing, an alternative to a traditional initial public offering that has only been deployed a handful of times. Photographer: Michael Nagle/Bloomberg via Getty Images Donate Become a member Monitors display Coinbase signage during the company's initial public offering in New York City on April 14, 2021. Photo: Michael Nagle/ Bloomberg via Getty ImagesMonitors display Coinbase signage during the company's initial public offering in New York City on April 14, 2021. Photo: Michael Nagle/Bloomberg via Getty Images Cryptocurrency Titan Coinbase Providing "Geo Tracking Data" to ICE ICE is now able to track transactions made through nearly a dozen different digital currencies, including Bitcoin, Ether, and Tether. Sam BiddleSam Biddle Sam Biddle Sam Biddle June 29 2022, 8:59 p.m. [GettyImage] Monitors display Coinbase signage during the company's initial public offering in New York City on April 14, 2021. Photo: Michael Nagle/ Bloomberg via Getty ImagesMonitors display Coinbase signage during the company's initial public offering in New York City on April 14, 2021. Photo: Michael Nagle/Bloomberg via Getty Images Coinbase, the largest cryptocurrency exchange in the United States, is selling Immigrations and Customs Enforcement a suite of features used to track and identify cryptocurrency users, according to contract documents shared with The Intercept. In August 2021, Coinbase sold a single analytics software license to ICE for $29,000, followed by a software purchase potentially worth $1.36 million the next month, but details of exactly what capabilities would be offered to the agency's controversial Homeland Security Investigations division of were unclear. A new contract document obtained by Jack Poulson, director of the watchdog group Tech Inquiry, and shared with The Intercept, shows ICE now has access to a variety of forensic features provided through Coinbase Tracer, the company's intelligence-gathering tool (formerly known as Coinbase Analytics). Coinbase Tracer allows clients, in both government and the private sector, to trace transactions through the blockchain, a distributed ledger of transactions integral to cryptocurrency use. While blockchain ledgers are typically public, the enormous volume of data stored therein can make following the money from spender to recipient beyond difficult, if not impossible, without the aid of software tools. Coinbase markets Tracer for use in both corporate compliance and law enforcement investigations, touting its ability to "investigate illicit activities including money laundering and terrorist financing" and "connect [cryptocurrency] addresses to real world entities." According to the document, released via a Freedom of Information Act request, ICE is now able to track transactions made through nearly a dozen different digital currencies, including Bitcoin, Ether, and Tether. Analytic features include "Multi-hop link Analysis for incoming and outgoing funds," granting ICE insight into transfers of these currencies, as well as "Transaction demixing and shielded transaction analysis" aimed at thwarting methods some crypto users take to launder their funds or camouflage their transactions. The contract also provides, provocatively, "Historical geo tracking data," though it's unclear what exactly this data consists of or from where it's sourced. An email released through the FOIA request shows that Coinbase didn't require ICE to agree to an End User License Agreement, standard legalese that imposes limits on what a customer can do with software. When asked about the ICE contract and the data involved, Coinbase spokesperson Natasha LaBranche directed The Intercept to a disclaimer on its website stating "Coinbase Tracer sources its information from public sources and does not make use of Coinbase user data." LaBranche did not answer questions about how ICE is using Coinbase Tracer, nor if the company imposed any limits to that use. Join Our Newsletter Original reporting. Fearless journalism. Delivered to you. I'm in Coinbase has in recent years made a concerted effort to pitch its intelligence features to government agencies, including the IRS, Secret Service, and Drug Enforcement Administration. Earlier this month, Coinbase vice president of global intelligence John Kothanek testified before a congressional panel that his company was eager to aid the cause of Homeland Security. "If you are a cyber criminal and you're using crypto, you're going to have a bad day. ... We are going to track you down and we're going to find that finance and we are going to hopefully help the government seize that crypto." Coinbase's government work has proved highly controversial to many crypto fans, owing perhaps both to the long-running libertarian streak in that community and the fact that these currencies are so frequently used to facilitate various forms of fraud. The Coinbase Tracer tool itself was birthed in controversy. In 2019, Motherboard reported that Neutrino, a blockchain-analysis firm the company acquired in order to create Coinbase Tracer, "was founded by three former employees of Hacking Team, a controversial Italian surveillance vendor that was caught several times selling spyware to governments with dubious human rights records, such as Ethiopia, Saudi Arabia, and Sudan." Following public outcry, Coinbase announced these staffers would "transition out" of the company. Homeland Security Investigations, the division of ICE that purchased the Coinbase tool, is tasked not only with immigration-related matters, aiding migrant raids and deportation operations, but broader transnational crimes as well, including various forms of financial offenses. It's unclear to what end ICE will be using Coinbase. The agency could not be immediately reached for comment. Update: June 29, 2022 This article has been updated with a response from Coinbase and additional detail about the company's business relationship with ICE. Correction: June 29, 2022 A previous version of this article misattributed a quotation from Coinbase VP John Kothanek to the company's CEO, Brian Armstrong. Wait! Before you go on about your day, ask yourself: How likely is it that the story you just read would have been produced by a different news outlet if The Intercept hadn't done it? Consider what the world of media would look like without The Intercept. Who would hold party elites accountable to the values they proclaim to have? How many covert wars, miscarriages of justice, and dystopian technologies would remain hidden if our reporters weren't on the beat? The kind of reporting we do is essential to democracy, but it is not easy, cheap, or profitable. The Intercept is an independent nonprofit news outlet. We don't have ads, so we depend on our members -- 35,000 and counting -- to help us hold the powerful to account. Joining is simple and doesn't need to cost a lot: You can become a sustaining member for as little as $3 or $5 a month. That's all it takes to support the journalism you rely on.Become a Member Contact the author: Sam Biddle Sam Biddle[email protected] theintercept.com@samfbiddle Related Latest Stories [placeholde] # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # [placeholde] # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # [placeholde] # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # Join the conversation The Intercept_ Join Our Newsletter Become a Member [ ] [I'm in] By signing up, I agree to receive emails from The Intercept and to the Privacy Policy and Terms of Use. Fetching more