US Homeland Security Signs a $1.4 Million Deal with Coinbase Analytics

The Immigration and Customs Enforcement (ICE) branch of the US Homeland Security has inked a $1.36 million deal with the cryptocurrency exchange Coinbase.

According to the Federal Procurement Data System, this contract has been given for “business application” and “application development software.” The contract further reads, “This requirement is LAW ENFORCEMENT SENITIVE[sic], therefore minimal information will be provided publicly.”

According to the contract summary, the deal uses Coinbase’s blockchain tracing software, Coinbase Analytics, for $455,000 for one year, which goes up to $1.4 million if extended through 2024.

This isn’t Coinbase’s first contract with the ICE, which paid the company $29,000 for its forensic software on the basis that Coinbase was “the only vendor who can reasonably provide the services required by the agency.”

The latest deal is worth more than 40x of the last time and is Coinbase’s largest federal contract yet.

Last year, it became public that Coinbase wanted to sell its analytics tool to two US government branches: the Drug Enforcement Agency and the Inland Revenue Service.

Coinbase Analytics was formerly known as Neutrino before the exchange acquired it in 2019 for $13.5 million.

The acquisition was a controversial one as Neutrino was founded by the members of the Italian spyware company Hacking Team. Last year, CEO Brian Armstrong expressed his “mistake” of making the purchase and laid off the dubious members of the team.

At the time, he also stressed that information offered in its Analytics software “has always been kept completely separate from Coinbase internal data.”

Coinbase CEO further said the company wanted to recoup some costs and build relationships with law enforcement. Hence, it decided to sell its software to government agencies.