The leading U.S. cryptocurrency exchange Coinbase has signed a technology development contract for the Department of Homeland Security worth $ 1.36 million.
As part of the agreement, Coinbase signed a deal to provide “application development software as a service” to the U.S. Immigration and Customs Service (ICE).
The contract goes into effect on September 16, and Coinbase will receive $ 455,000 from the division. However, the contract can be extended for up to 3 years in total, which would result in Coinbase receiving up to approximately $ 1.36 million.
The deal is the second partnership signed between Coinbase and ICE, with the exchange securing a $ 30,000 contract in August to provide “computer forensic services” to the agency.
The news received a backlash from the crypto community, with Human Rights Chief Strategy Officer Alex Gladstein confirm relatively low compensation due to the size of Coinbase’s business and the reputational risk the partnership poses to the exchange:
“By and large, that’s not too much money for Coinbase. Strangely, they risk their reputation for such a relatively small sum. “
The news also sparked criticism of Coinbase’s takeover of blockchain analytics startup Neutrino in 2019.
In the year of the acquisition, it was reported that the folks behind Neutrino were formerly part of Hacking Team – a company that helped authoritarian regimes spy on journalists.
Giancarlo Russo, CEO of Neutrino, is the former COO of the Hacking Team, while its CTO Alberto Ornaghi has been with the company for over eight years. According to the Washington Post, the Italian company was involved in the murder of several journalists in the Middle East between 2013 and 2018.
In March 2019, Coinbase CEO Brian Armstrong said Neutrino employees with a previous relationship with the controversial Hacking Team would be moving from their new roles on the exchange.
feedback Kraken CEO Jesse Powell tweeted for Coinbase’s new contract with ICE:
“Even more bizarre, they bought it and put it on credit to provide that service to the government.”
Related: Coinbase CEO Defends Analytics Platform Licensing for Government Agencies
Since acquiring Neutrino, Coinbase has also signed a deal with the U.S. intelligence agency, which in July 2020 announced the establishment of the Cyber Fraud Task Force – these five:
“Cryptocurrencies offer a disturbing new way for villains and countries to circumvent international sanctions and undermine traditional financial markets, thereby damaging their interests.” The United States and its allies. “
Coinbase is currently embroiled in a regulatory dispute with the Securities and Exchange Commission. Regulators tinkered with their proposed stablecoin loan product and threatened to take the company to court.