Coinbase Is Selling Data on Crypto and ‘Geotracking’ to ICE

Coinbase Is Selling Data on Crypto and ‘Geotracking’ to ICE
Photo: Sharaf Maksumov, Shutterstock

Coinbase Tracer, the analytics arm of the cryptocurrency exchange Coinbase, has signed a contract with U.S. Immigrations and Customs Enforcement that would allow the agency access to a variety of features and data caches, including “historical geo tracking data.”

Coinbase Tracer, according to the website, is for governments, crypto businesses, and financial institutions. It allows these clients the ability to trace transactions within the blockchain. It is also used to “investigate illicit activities including money laundering and terrorist financing” and “screen risky crypto transactions to ensure regulatory compliance.”

The deal was originally signed September 2021, but the contract was only now obtained by watchdog group Tech Inquiry. The deal was made for a maximum amount of $US1.37 ($2) million, and we knew at the time that this was a three year contract for Coinbase’s analytic software. The now revealed contract allows us to look more into what this deal entails.

This deal will allow ICE to track transactions made through twelve different currencies, including Ethereum, Tether, and Bitcoin. Other features include “Transaction demixing and shielded transaction analysis,” which appears to be aimed at preventing users from laundering funds or hiding transactions. Another feature is the ability to “Multi-hop link analysis for incoming and outgoing funds” which would give ICE insight into the transfer of the currencies. The most mysterious one is access to “historical geo tracking data,” and we are unsure how location data relates to crypto or what ICE may use it for in this context. (ICE has not yet responded to Gizmodo’s request for a comment).

This is not the first time Coinbase has made a deal with government agencies. In August 2021, Coinbase signed a contract with ICE to provide the agency with licenses for their analytics software, but that contract was worth $US29,000 ($40,258). And in April 2021, Coinbase sold the licence from Coinbase Tracer to the Secret Service for under $US50,000 ($69,410). A similar deal was done the year before that in May 2020.

Coinbase said that the information to be provided by the analytic software is the exchange of customer data.

“All Coinbase Tracer features use data that is fully sourced from online, publicly available data,” the spokesperson told Coindesk, “And do not include any personally identifiable information for anyone, or any proprietary Coinbase user data.” Coinbase has not yet responded to Gizmodo’s request for a comment.