The Department of Homeland Security and Coinbase have signed a million-dollar agreement. The government will now examine the data of American citizens using Coinbase's services, as part of the agreement.
US Department of Homeland Security licensed Coinbase Analytics software for $1.36 million to prevent cross-border criminal activity and illegal immigration.
Coinbase has not said what information will be reviewed according to its official documents. Data from the SAM.gov database demonstrates that Coinbase "is the only vendor who can fairly provide the ICE with the services requested" due to the covert nature of the ICE's relationship with Coinbase. This document suggests the public will be given relatively little information.
Coinbase is no stranger to government contracts, but this would be the most valuable one for the company.
The US Secret Service had already licensed Coinbase's tools for use by the company. Blockchain forensics has been used by the Secret Service. It would cost $183,750 and extend until May 2024.
Since Coinbase's association with the US Government, many crypto investors have expressed concerns about the privacy and security of their funds. So, Coinbase reaffirmed that its analytics tool is separate from customer data.
In a recent statement, Coinbase CEO Brian Armstrong stated that the company's analytics software is profitable.
"We sell blockchain analytics software to a small number of companies since it compiles publicly available blockchain data. There is a market for blockchain analytics software, so we sell it."
Coinbase's analytics capabilities have also caught the attention of the Drug Enforcement Administration (DEA) and the Internal Revenue Service (IRS).
In any case, Chainalysis appears to be the largest beneficiary of U.S. government deals to date, a fast-growing blockchain data provider.
Based on data reviewed of 82 federal procurement contracts, at least $10 million ($10,690,706) in American tax dollars has been spent on Chainalysis tools, services, and training since the company was founded in 2015. With possible extensions of contracts, the company may bring in more than $14 million.