Coinbase Supplies Data To ICE To Identify And Track Crypto Users, Leaked Documents Reveal

Coinbase, a publicly-traded company that operates as a cryptocurrency exchange platform, is reportedly supplying software to the Immigrations and Customs Enforcement (ICE), allowing the agency to identify and track cryptocurrency investors.

Supposed leaked contracts obtained by Tech Inquiry's Jack Paulson show that ICE, a division of the U.S. Department of Homeland Security (DHS), currently uses the "intelligence-gathering tool" Coinbase Tracer, giving a host of "forensic features," which provides the agency with the ability to access transactions and historical geo-tracking data of crypto users, The Intercept reported.

The report also revealed that in August 2021, ICE purchased an analytics software worth $29,000 from Coinbase and acquired another software costing $1.36 million in September of that year. ICE was created to protect the country from illegal immigration and cross-border crimes.

In the documents released by the Freedom of Information Act, ICE was not obliged to agree with the End User License Agreement (EULA), meaning it can do anything with the data tracking tool.

Coinbase states on its official website that Coinbase Tracer "sources its information from public sources and does not make use of Coinbase user data." The Intercept reached out to Coinbase to get its response on the issue, but the report claimed that its spokesperson Natasha LaBranche only gave a link to the company's disclaimer and "did not answer questions about how ICE is using Coinbase Tracer, nor if the company imposed any limits to that use."

This is not the first instance where the cryptocurrency exchange was reported to be working with government agencies and, in recent years, has provided intelligence features to the IRS, DEA and the Secret Service, The Intercept said. The cryptocurrency exchange platform has over 73 million customers all over the world and holds a treasure trove of data.

"We regularly receive and respond to requests from law enforcement and government agencies seeking customer account information and financial records in connection with civil, criminal, or other investigative matters. These requests can include subpoenas, court orders, search warrants, or other forms of the formal legal process. We have an obligation to respond to such requests if they are valid under financial regulations and other applicable laws," Coinbase said in its Transparency Report covering January to September 2021.