Coinbase Will Reportedly Provide Crypto User Data to the US Government

Paigambar Mohan Raj
Source: TechCrunch

According to reports, the well-known US cryptocurrency exchange Coinbase will disclose details to US Immigration and Customs Enforcement (ICE) on crypto users.

According to a contract obtained by Jack Poulson, director of Tech Inquiry, the information will include historical geo-tracking data and transaction history.

The data will particularly help identify crypto users and investors. Additionally, thanks to added material in the contract, the United States Department of Homeland Security’s powers will be enhanced. This is in addition to the previous known three-year agreement between the crypto exchange and the U.S. Immigrations and Customs Enforcement agency (ICE).

However, a representative from Coinbase denied that the data provided by the analytics tool is client information. The individual stated,

“All Coinbase Tracer features use data that is fully sourced from online, publicly available data, and do not include any personally-identifiable information for anyone, or any proprietary Coinbase user data.”

The agreement was signed in September of last year. It had a maximum value of $1.37 million. Moreover, this contract is among several other contracts signed between the exchange and US government organizations.

An agreement for $29,000 was inked between Coinbase and ICE in August 2021 to supply the organization with licenses for its analytics software. Also, Coinbase sold licenses to the US Secret Service for its proprietary software, Coinbase Tracer. The deals with the Secret Service took place in April 2021 and May 2020. Both of these deals were for less than $50,000 each.

Formerly known as Coinbase Analytics, Coinbase Tracer has encountered criticism in the past as well. Coinbase acquired the exchange division that created the software in 2019 from Neutrino, a blockchain intelligence company. Its executive team had previously worked with a startup that sold spyware to several governments, including Saudi Arabia, which is known for violating human rights.

Coinbase has not had its best year, and the popular exchange has had to let go of a large chunk of its employees to cut costs. They are one of many firms that have been severely affected by the current market slump.

The exchange also faces a lawsuit for listing the fallen UST (TerraUSD) token. The exchange allegedly did not perform adequate due diligence into the TerraUSD stablecoin’s characteristics before listing it on its marketplace.