Cryptocurrencies, how and why Coinbase collaborates with the US government
Coinbase has sold a cryptocurrency tracking tool to ICE, the US government agency for countering immigration and transnational crimes. All the details
Coinbase, the largest cryptocurrency exchange platform in the United States, has sold a series of features used to track and identify users to Immigration and Customs Enforcement (ICE: it is the federal agency that is primarily concerned with combating irregular immigration). of cryptocurrencies. This was revealed by the Intercept on the basis of the documents obtained.
CONTRACTS BETWEEN COINBASE AND ICE
In August 2021 Coinbase sold the license of a data analysis software to ICE for 29 thousand dollars; a month later he sold the agency a software with an estimated value of 1.3 million. Jack Poulson, director of the Tech Inquiry technologies observatory, has obtained a new contract between Coinbase and ICE and shared it with the Intercept : the document shows that the federal authority now has access to the functionalities of Coinbase Tracer. Coinbase's analysis and data collection tool.
WHAT IS COINBASE TRACER
Coinbase Tracer allows users, whether they are private individuals or government entities, to track transactions carried out on the blockchain (it is the technology behind the trading of cryptocurrencies). Usually, in reality, the registers of the blockchain are public, but the enormous amount of data can make it very difficult – explains the Intercept – to follow the movements of the coin from the sender to the recipient without the aid of special software.
Coinbase also sells Tracer to law enforcement, arguing that the service allows them to "investigate illegal activities, including money laundering and terrorist financing" and "link [cryptocurrency] addresses to entities in the real world" .
Thanks to Coinbase Tracer, therefore, the ICE is able to track transactions carried out in various digital currencies such as Bitcoin, Ether and Tether; it can monitor their inflows and outflows and can also counter the methods used by some users to launder their funds or hide their transactions. According to the contract, the agency also has "historical geo-tracking data", but it is not clear what they consist of and where they come from.
WHAT IS ICE DOING WITH A CRYPTOCURRENCY TRACKING SYSTEM?
Contacted by the Intercept , a spokesperson for Coinbase stated that Tracer reports public information and does not use the data of users of the platform. He did not answer questions about the specific use of the tool by the ICE.
The ICE division that purchased the Coinbase instrument is called Homeland Security Investigations: it does not only deal with the fight against irregular immigration but with transnational crimes more generally, including those of a financial nature. An ICE spokesperson told the Intercept that, thanks to Tracer, the agency will be able to more effectively monitor both the trafficking of illegal opioids (such as fentanyl, responsible for tens of thousands of overdose deaths in the United States) on the dark side . web , and the gangs of cybercriminals who attack critical infrastructures and demand payment of a ransom in exchange for unlocking the data ( ransomware , in jargon).
"This tool," said the ICE referring to Tracer, "does not reveal any sensitive personally identifiable information, is used only in criminal investigations and is not used in the enforcement of civil immigration law." However, he did not explain the specific and concrete ways of using the tool .
STUFFING GOVERNMENT AGENCIES
In recent years Coinbase has tried to present its data analysis systems as useful tools for the work of government agencies such as the DEA, the American anti-drug authority. For example, a few days ago, the vice president of Coinbase's global intelligence division, John Kothanek, stated that “if you are a cybercriminal and you use cryptography, you are going to have a bad day […]. We will track you down and find those finances, and we hope to help the government seize that cryptocurrency. "
Coinbase's wink at government authorities didn't appeal to all cryptocurrency fans. The Intercept offers two explanations: it has to do with the libertarian ideology of the crypto community, or the fact that these currencies are often used to facilitate illicit transactions or fraud.
WHAT HACKING TEAM HAS TO DO
Coinbase Tracer, in truth, has been a controversial tool since its inception. In 2019, the specialized portal Motherboard made it known that Neutrino, a blockchain analysis company acquired by Coinbase to create the tracking service in question, had been founded by three former employees of Hacking Team , the Italian IT company involved in the sale of espionage software even to authoritarian governments that do not respect human rights (such as Saudi Arabia and Ethiopia, for example).
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/coinbase-tracciamento-criptovalute-ice/ on Mon, 04 Jul 2022 13:57:29 +0000.