Coinbase Says It Doesn’t Sell Customer Data After ICE’s ‘Geo-Tracking’ Contract Surfaces

What’s up

Details of a contract between Coinbase and the U.S. Department of Immigration and Customs have surfaced for the first time.

why does it matter

The agreement includes “historical geo-tracking data” not available through public sources.

Major cryptocurrency exchange Coinbase has a contract to provide the US Immigration and Customs Enforcement, or ICE, with data analysis tools to help investigate financial crimes, and one of the features on offer is raising some eyebrows.

The ICE settlement was reported last year, but the full documents emerged this week via a Freedom of Information Act request from watchdog organization Tech Inquiry, which was initially reported by The Intercept on Wednesday.

The services offered by Coinbase Analytics in the agreement include a “blockchain explorer”, “multi-hop link analysis for inbound and outbound funds” and “transaction de-combining and shielded transaction analysis”. (The company now sells this toolset to public and private customers like Coinbase Tracer.)

Coinbase also includes a public notice for these services, which says that it “gets its information from public sources and does not make use of Coinbase user data”.

Several companies, such as Chainalysis and Nansen, provide similar analytics tools that use software to sift through the massive amount of public transaction data on cryptographic blockchains for everything from performing due diligence or seeking investment insights to tracking money launderers and investigate the financing of terrorism. .

But there was one other feature highlighted in the services that Coinbase was offering to the federal government that stands 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 do not access or store geolocation data in transactions, so it is unclear how Coinbase would provide this data from public sources.

ICE says the agreement complies with all laws, policies and regulations governing the collection and tracking of data.

“The agreement provides a tool that complements…the ability to investigate deadly opioid traffickers on the dark web and cyber criminals seeking to attack critical infrastructure,” an ICE spokesperson told me via email. “This tool does not reveal any sensitive personally identifiable information, it is only referenced in criminal investigations and is not used in civil immigration enforcement.”

Coinbase did not 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 obtains its information from public sources and does not use Coinbase user data. Ever.”

The ICE contract only covers data on 12 blockchains, including ethereum and all ERC-20, bitcoin, litecoin, tether, EOS, stellar and ripple tokens. The one-year contract went into effect last August and ends on August 9.

Correspondence included in documentation acquired by reveals that the company also billed the US Drug Enforcement Administration and the French National Police for similar tools prior to August 2021.

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