US Immigration and Customs Enforcement, also known as ICE, has spent a staggering $1.36 million on a new contract with major US cryptocurrency exchange Coinbase. A certain Jack Poulson noticed this yesterday:
I missed this in procurement feed yesterday, but cryptocurrency exchange platform Coinbase has a new award with ICE which is either 15x or nearly 50x as large as its previous award, depending on how you count.
It is Coinbase’s largest fed contract.https://t.co/B4IsabH4sw
1/2 pic.twitter.com/zAwJILS0X1
— Jack Poulson (@_jack_poulson) September 18, 2021
ICE is the US federal government’s controversial immigration and customs agency and is part of the US Department of Homeland Security.
It is by far the largest contract ever signed by Coinbase with the US government. ICE bought blockchain analysis software from Coinbase in August for $29,000. However, it was not disclosed at the time what exactly the software is used for. Details about this new deal are also very scarce for the time being.
Nevertheless, the new contract has been concluded for no less than 45 times larger amount than the previous one. This is not the first time Coinbase has sold analytics software to a US government agency. Coinbase announced last summer that the company wanted to sell its software to the Drug Enforcement Agency (DEA) and Internal Revenue Service (IRS). Coinbase received a lot of criticism for that from the cryptocurrency community. The contract was signed a month later with the US Secret Service for $184 thousand.
The Coinbase software itself is not without controversy either. This software comes from Neutrino, a research company that Coinbase acquired at the end of 2019. That sparked the #DeleteCoinbase movement on Twitter. Several Neutrino employees were linked to a hacker group that sold spyware to authoritarian regimes. These workers were fired shortly afterwards.
Coinbase, which went public earlier this year, also acquired analytics firm Skew a few months ago. Despite the fact that the bitcoin (BTC) exchange clearly wants to be friends with the US government, it may soon get in trouble with the Securities and Exchange Commission (SEC).
Coinbase had to pay a multimillion-dollar fine to the Commodity Futures Trading Commission (CFTC) earlier this year. The exchange has also recently come under fire for the USDC stablecoin and customer service. Despite this, the company recently raised $2 billion from investors and applied for a new derivatives license.