So much for decentralized finance.
The largest cryptocurrency exchange in the U.S., Coinbase, has been reportedly selling Immigrations and Customs Enforcement tools to track and identify cryptocurrency users, a stunning new report from The Intercept revealed this week.
The company "sold a single analytics software license to ICE for $29,000" back in August 2021, the report says. The next month, however, it sold software worth $1.36 million to the agency, the report says.
A contract involving the sales revealed that ICE "now has access to a variety of forensic features provided through Coinbase Tracer", the company's internal intelligence tool.
The tool allows people to trace transactions through the blockchain. Coinbase markets the software primarily for use in corporate compliance and law enforcement, the report says. It boasts that the tool has the ability to “investigate illicit activities including money laundering and terrorist financing” and “connect [cryptocurrency] addresses to real world entities.”
The contract revealed that ICE is now able to track transactions over a dozen digital currencies. The contract also revealed that “historical geo tracking data" was being provided to ICE, though The Intercept said details about what this data entails are fuzzy.
Coinbase spokesperson Natasha LaBranche, when asked about the contract, referenced The Intercept to the company's disclaimer on its website, which says: “Coinbase Tracer sources its information from public sources and does not make use of Coinbase user data.”
The sale comes as part of a broader pitch to sell its intelligence services to agencies like the IRS and the Secret Service, the report reveals.
Coinbase vice president of global intelligence John Kothanek said earlier this month in front of Congress: “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.”