Chainalysis challenges ICE’s $94.7M TRM award
Chainalysis Government Solutions has expanded its legal challenge against a $94.66 million blockchain analytics contract that U.S. Immigration and Customs Enforcement awarded to TRM Labs.
- Chainalysis filed seven claims challenging ICE’s $94.66 million sole-source blockchain analytics award to TRM Labs.
- Seven claims challenge ICE’s evaluation, restrictive criteria, acquisition planning, and reliance on sole-source procurement authority.
- ICE gave interested vendors three days and one page to explain their relevant capabilities fully.
- Chainalysis alleges several requirements tracked TRM products but were omitted from the final needs statement.
- Oral argument is scheduled September 2, while the government has requested judgment by September 10.
A redacted complaint made public on Aug. 28 details seven claims against the U.S. government. Chainalysis alleges that ICE improperly avoided an open competition and evaluated potential suppliers against requirements that it did not fully disclose.
The filing represents Chainalysis’s account of the procurement. ICE and TRM Labs are contesting the case, and the U.S. Court of Federal Claims has not found that either party acted improperly.
JUST IN: Chainalysis is accusing ICE of steering a $95 million contract to rival TRM Labs
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It says the agency used undisclosed criteria that matched TRM’s existing products pic.twitter.com/9uqnrI501L
Chainalysis says ICE changed its evaluation criteria
ICE awarded contract 70CMSD26C00000005 to TRM Labs on July 1. The one-year agreement runs through June 30, 2027 and covers forensic software and support for Homeland Security Task Force investigations.
The work includes blockchain tracing, scam disruption, cybercrime investigations and support for sextortion cases. TRM Labs later joined the lawsuit as a defendant-intervenor, allowing it to defend the award alongside the government.
Chainalysis’s first three claims focus on how ICE defined and evaluated its requirements. The company argues that its capability statement addressed every requirement in ICE’s final Statement of Need. It therefore disputes ICE’s determination that TRM was the only responsible source able to perform the work.
Chainalysis also alleges that ICE relied on an earlier Request for Information when deciding whether another supplier could qualify. The company says several requirements from that document did not appear in the final Statement of Need against which vendors were told to prepare their submissions.
Those disputed requirements included access to a proprietary scam-reporting database containing more than one million records, automated notifications to virtual asset service providers and operational partnerships with stablecoin issuers.
The seven claims target ICE’s sole-source process
The fourth claim alleges that ICE failed to give Chainalysis’s capability statement meaningful consideration. ICE published its notice of intent on June 8 and required responses by June 11.
Interested suppliers could submit only one page, although the Statement of Need itself ran for roughly one and a half pages and covered three operational areas. Chainalysis says ICE asked no follow-up questions before completing its market research report the following day.
The complaint states that ICE’s report recognized both companies as having mature investigative platforms and artificial intelligence integration. It also allegedly recognized that both could deploy cleared personnel. However, ICE concluded that Chainalysis lacked other capabilities needed for the program.
Chainalysis disputes that assessment. It argues that the short response period, one-page restriction and absence of follow-up questions turned the capability review into a “mere formality.” That wording reflects the company’s allegation, not a court finding.
The fifth claim concerns allegedly restrictive specifications. Chainalysis says questions about automated asset freezes, stablecoin partnerships and the size of a victim-reporting database closely matched TRM products or commercial arrangements.
Chainalysis claims it offered alternative methods that could achieve the same investigative goals. The complaint says ICE’s justification did not explain why those alternatives were insufficient.
Chainalysis challenges ICE’s legal authority
The sixth claim addresses ICE’s use of the federal government’s Revolutionary FAR Overhaul rules. Chainalysis argues that ICE relied on a “unique capabilities” rationale found in an older version of federal acquisition regulations but omitted from the rules governing this procurement.
Current acquisition rules allow an agency to avoid full and open competition when only one responsible source can meet its needs. They also require consideration of capability statements and prohibit agencies from using inadequate planning to justify limited competition.
Chainalysis’s seventh claim focuses on that planning requirement. The company notes that ICE issued its information request on May 28, received a 20-page response from Chainalysis on June 2 and announced its planned sole-source award six days later.
ICE then closed the capability-statement period on June 11 and completed its market research report on June 12. Chainalysis argues that this timetable left too little time to reconcile the different requirements or assess alternative suppliers.
The government may argue that ICE reasonably concluded TRM alone could meet its operational requirements. The merits of that position remain for the court to decide.
The September 2 hearing could determine the contract
Chainalysis wants the court to declare the award unlawful, permanently stop performance and direct ICE to conduct a full and open competition. It also seeks legal costs under the Equal Access to Justice Act.
A successful challenge would not automatically transfer the contract to Chainalysis. The court could instead require ICE to reconsider its analysis, reopen competition or prepare a legally sufficient sole-source justification. It could also deny the requested injunction and leave the TRM contract in place.
Judge Stephen S. Schwartz has placed the case on an expedited schedule. Oral argument is set for Sept. 2 at 10 a.m. EDT in Washington, D.C. The government has asked for a ruling by Sept. 10, although the court is not bound by that requested date.
As crypto.news previously reported, the contract supports a growing federal reliance on private blockchain-intelligence providers. Both companies have worked with law-enforcement agencies, and both contributed tracing support to a $701 million international asset-freezing operation.
In related coverage, Chainalysis recently produced 14,300 investigative leads from cryptocurrency activity connected to suspected child-abuse networks. The ICE dispute now asks the court to decide whether the government followed procurement law when choosing which provider would support another major investigative program.