Coinbase helps ICE track crypto buyers


Crypto giant Coinbase has provided the US Immigration and Customs Enforcement (ICE) with a host of software features used to track the identity and location of cryptocurrency owners, a new investigation by The interception revealed. This is the first time we’ve gotten to understand just how big ICE’s $1.36 million deal with Coinbase really is.

It turns out that the contract – a copy of which was obtained by Tech Inquiry’s Jack Poulson – is indeed extensive. Coinbase has given ICE the ability to fully track transactions made on the blockchain, including purchases and sales of Bitcoin, Ether, and Tether, as well as other popular cryptocurrencies.

Watching crypto transactions drop might not seem like much, but Coinbase’s software, Coinbase Tracer, is powerful in its scope and nuance.

Geolocation data — Coinbase Tracer essentially takes the millions and millions of transactions recorded on the blockchain and makes sense of them. Coinbase positions the software suite as a powerful way for agencies to “investigate illicit activity, including money laundering and terrorist financing.” The company also has promises that Tracer can “link activities to real-world entities”.

ICE’s contract with Coinbase makes it clear that Tracer can be used to provide “historical geolocation data”, although the contract does not specify what exactly this dataset is. Since it is ICE’s Homeland Security Investigations Department that uses Coinbase Tracer, any type of data that can be used to track immigrants is dangerous. HSI is – to put it in the nicest way possible – best known for doing sleazy bullshit to incarcerate and deport immigrants.

Typically tight-lipped — Coinbase, as you might expect, didn’t have much to say about how ICE uses Coinbase Tracer. Company spokeswoman Natasha LaBranche simply said The interception to view a disclaimer that says, “Coinbase Tracer derives its information from public sources and does not use Coinbase user data.” None of The interceptionQuestions have been answered.

Just because it’s public… — Coinbase’s de facto defense here is one we’ve been seeing with alarming frequency lately. All information analyzed by Coinbase Tracer is indeed public – such is the nature of the blockchain – but does that mean that anyone with a million or so dollars should be able to choose and extract this data as they please? The raw data is public; information derived from algorithms about it is not.

Facial recognition technology company Clearview AI has repeatedly used the same defense to back up its huge Internet image database. The billions of images retrieved in Clearview’s software are, yes, publicly available on the Internet, whether on social media or elsewhere. This does not make scratching them less invasive.

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