ICE’s New Intel Program Used in Every Homeland Security Crypto Investigation

Immigration and Customs Enforcement’s (ICE) recently disclosed “Cryptocurrency Intelligence Program” (CIP) is deployed in every crypto-facing Homeland Security Investigations (HSI) case, says the agent whose unit built the tool.

In an email statement, Al Giangregorio – unit chief at the HSI’s National Bulk Cash Smuggling Center (BCSC) – shed a little light on the mysterious intel program first mentioned in ICE’s recent FY 2021 budget proposal. Without explaining exactly what CIP is or how it works, he broadly said it helps HSI agents whenever cryptocurrency is involved. 

“The CIP supports any HSI investigation involving virtual currency or blockchain technology,” Giangregorio said. “The program has assisted diverse investigations, including those involving methamphetamine and MDMA dealers, human trafficking, elder fraud, dark net market drug vendors, child sexual exploitation sites, and, of course, trafficking in opioids.”

CIP was established by the BSCS, a Vermont-based outpost of the sprawling homeland security apparatus that slowly rose in 9/11’s wake. The 2001 PATRIOT act criminalized international cash smuggling and the financial crimes-focused BCSC helps ICE’s HSI agents track violators down.

Cryptocurrency was not an legitimate threat when BCSC incorporated in 2009. In the years since, though, crypto has grown into a more prominent criminal vehicle, prompting many federal law enforcement agencies to invest hundreds of thousands, even millions, into private sector investigatory tools.

“Over time, the BCSC has recognized that transnational criminal organizations have evolved and diversified the way they transfer illicit proceeds,” he said. 

The increasing shift to digital money also prompted HSI’s anti-cash smuggling experts to build the government the in-house program, according to Giangregorio.

“The BCSC established the CIP to adapt to changing methodologies and technology to target money laundering related to all types of criminal activity.”

Taken in the context of ICE’s FY 2021 budget proposal, Giangregorio’s explanation gives something of a backstory to the otherwise unknown CIP. 

The budget proposal described CIP as an unlicensed money services business identifier that crawls across illicit crypto broker hotspots – peer-to-peer sites, darknet markets, classifieds – to gather intel. 

It is not known publicly how much CIP cost to establish or run. However, a previous CoinDesk investigation found ICE was one of the largest spenders on blockchain forensic services in the federal government. According to public documents, the agency spent some $2.6 million on contracts with Chainalysis between 2017 and 2019.