The Immigration and Customs Enforcement division of the United States Department of Homeland Security has paid Coinbase $1.36 million for a license to use Coinbase Analytics to study the knowledge of American residents.
Coinbase does it once more.
By inking a deal with the Department of Homeland Security to supply them with a Coinbase Analytics license, Coinbase goes against the grain of privacy purists’ opinions that their partnerships with US authorities go against the essence of cryptocurrency. The CEO of Coinbase, Brian Armstrong, assures privacy advocates that the Coinbase Analytics product does not provide any information other than what is publicly visible on the blockchain. It does not make Know Your Customer information available alongside Coinbase Analytics aggregated results.
What exactly is Coinbase Analytics?
Coinbase Analytics, among other things, connects cryptocurrency transactions to real-world entities and can investigate fraudulent blockchain activity. The exact data that the ICE will use from Coinbase’s blockchain forensic tool is unknown. Coinbase acquired Neutrino, a previously external analytics company, in 2019 because it did not want to share data with third parties in order to comply with anti-money laundering laws.
Members of the spyware company Hacking Team founded Neutrino. As a result of the Hacking Team’s involvement in supplying spyware to oppressive regimes in Saudi Arabia, Sudan, and Venezuela, the acquisition was fraught with controversy, forcing Coinbase to part ways with the Hacking Team. Armstrong stated that the company needed to “rebuild the team.”
Blockchain analytics is gaining popularity.
The Drug Enforcement Administration and the Internal Revenue Service have both used Coinbase Analytics; the IRS will begin using it in 2020. According to IRS documents, the Coinbase Analytics software allows the client to track and interrogate cryptocurrency transactions across multiple blockchain networks. Coinbase recently licensed its forensic product to the US Secret Service as part of the agency’s consolidation of electronic and financial crimes into a single cyber fraud task force. The agreement with the United States Department of Homeland Security is thus the company’s fourth collaboration with a government agency in the United States.