Coinbase’s new deal with U.S. Homeland Security worth $1.36M, is around forty times bigger than its last.

Coinbase will provide the U.S. government’s Immigrations and Customs Enforcement branch with its blockchain analytics software. They have also provided its software to the U.S. Secret Service and Inland Revenue.

The U.S. Homeland Security’s Immigration and Customs Enforcement branch has given a $1.36 million contract to the crypto exchange giant Coinbase for “application development software” and “business application,” according to the Federal Procurement Data System.

The new deal, signed on Thursday, is Coinbase's largest federal contract in its history. It is also worth forty times more than Coinbase’s last contract with the Homeland Security branch.

Coinbase’s last contract with the ICE:

On August 9, the ICE had paid Coinbase $29,000 for forensics software. The contract was given to Coinbase on the basis that the firm is “the only vendor who can reasonably provide the services required by the agency", according to a document dated August 3. Details regarding what exactly are the ICE’s requirements from Coinbase software are unhidden. The same document also states, “This requirement is LAW ENFORCEMENT SENSITIVE [LEC], therefore minimal information will be provided publicly."

Coinbase’s other contact & 2019 controversy:

However, ICE does not remain the first government agency to request Coinbase’s services. In 2020, Coinbase had announced its desire to sell its analytics tools to two U.S. government branches: the Inland Revenue Service and the Drug Enforcement Agency.

The IRS exclaimed that it could easily use Coinbase analytics tools to catch blockchain-savvy tax dodgers. Coinbase Analytics was formerly known as Neutrino until Coinbase acquired Neutrino in 2019 for $13.5 million.

This acquisition was quite controversial since Neutrino team members were linked to an Italian organization called Hacking Team, which sold spyware.

Brian Armstrong, the Coinbase CEO, later expressed his regret towards the purchase. He also sacked the more dubious members of the team. Later, Coinbase sourced analytics software deals with the Secret Service and the IRS. 

Rushali Das

CBW - External Analyst

INDIA