The two biggest crypto-tracing firms are in court over a $94.66 million ICE deal

Chainalysis has asked a federal court to annul a ~$95 million award from Immigration and Customs Enforcement to its rival TRM Labs.

According to a recently unsealed complaint, ICE wrote the buying criteria around capabilities only TRM already had.

Three days and one page were all rivals got to respond

The $94.66 million contract is for a duration of one year, from July 1, 2026, to June 30, 2027. It covers forensic software and support for Homeland Security Task Force cases, including scams, cybercrime, and sextortion.

The federal award record lists $94,655,840 obligated and nothing paid out so far.

ICE put out a Request for Information (RFI) on May 28, with responses due June 2, and followed up with a Notice of Intent to sole source the work to TRM on June 8.

Companies that wanted to challenge that intent were given a separate Statement of Need and three days to respond, limited to one page.

Chainalysis Government Solutions, the vendor’s federal-facing subsidiary, says it filed its one-page statement on June 11 and was the only firm to do so.

ICE later defended the sole-source route, saying a market-research window of six days showed none of the eight companies that responded could match TRM.

The May RFI asked vendors 18 questions, including if a firm had a scam-victim database with more than one million records and an AI platform with “agentic data retrieval and entity resolution.”

It also asked if a firm had “an operational partnership with stablecoin issuers” to facilitate the coordination of illicit-asset freezes.

Many of those items, Chainalysis says, never re-emerged in the June Statement of Need, which based the job around scam disruption, cybercrime disruption, and sextortion disruption.

The word “sextortion” did not appear in the earlier RFI at all, the company notes, yet it became a headline requirement.

ICE nonetheless concluded that Chainalysis fell short on automated, real-time disruption, on blending on-chain and off-chain intelligence, and on victim notification at scale, according to the complaint.

Chainalysis says it was judged against thresholds it was never told would decide whether it could compete.

Beacon Network sits inside a T3 unit that froze $450 million

ICE justified the award by claiming that TRM had unique features, including a large proprietary scam-victim database, an AI-native investigative platform, automated freezes through its Beacon Network, formal ties to stablecoin issuers, and a security-cleared staff.

Chainalysis responds that several of those features were not part of the Statement of Need, and some were not exclusive to TRM.

It says ICE’s research recognized that both vendors had developed AI-enabled platforms and credited Chainalysis with law-enforcement experience and cleared personnel.

TRM’s Beacon Network operates with Tether and TRON through the T3 Financial Crime Unit, a partnership that Cryptopolitan reported had frozen over $450 million worth of USDT connected to criminal activity since 2024.

Part of what ICE cited was that real-world footprint, and part of what Chainalysis says was unfairly baked into the requirements.

On July 27, Chainalysis filed the sealed protest, and TRM filed the intervention to defend the award on July 28. A redacted version was filed on Friday, August 28.

Judge Stephen Schwartz has set oral arguments for September 2 on an accelerated track, with the government asking for a ruling by September 10.

Chainalysis has requested the court to stop the TRM deal and have a full and open competition.

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