Coinbase potentially selling blockchain analytics software to government agencies! Public documents reveal Coinbase potentially selling blockchain analytics software to the DEA and the IRS.
Records obtained by The Block show that the DEA And the IRS intend to buy licenses from Coinbase for an analytics platform called Coinbase Analytics.
The IRS document draws a connection between Coinbase Analytics and Neutrino, an intelligence agency that Coinbase purchased in 2019. The acquisition drew intense controversy due to its founders’ involvement in the firm Hacking Team, an Italian spyware team. Coinbase ultimately said that they would part ways with those in the company associated with the Hacking Team.
As the IRS document explains:
“As law enforcement techniques evolve and other cryptocurrencies gain acceptance, criminals are using other types of cryptocurrencies, not just Bitcoin to facilitate their crimes. In addition to the Bitcoin Blockchain, Coinbase Analytics (fka Neutrino) allows for the analysis and tracking of cryptocurrency flows across multiple blockchains that criminals are currently using. Coinbase Analytics also provides some enhanced law enforcement sensitive capabilities that are not currently found in other tools on the market. This action will result in a Firm Fix Priced purchase order, Period of Performance: One base year from date of award with one 12-month option.”
Coinbase, according to public records, has not been officially granted the awards. They also do not appear in searches on USASpending.gov.
It is unclear how much Coinbase would be paid by the government entities for the licenses. The DEA document subheader reads “Required for Limited Source Acquisitions Over $10,000 but not Exceeding $250,000”.
The documents also give hints as to how the agencies would apply Coinbase’s platform to their respective organizations. The IRS would utilize the software in its Criminal Investigation Cyber Crimes Unit.
The DEA document states:
“Coinbase Analytics (CA) cryptocurrency intelligence tool, provides investigators with identity attribution and de-anonymities virtual currency addresses domestically and internationally. CA is known for its accuracy of attribution which includes some of the most conservative heuristics used in commercial blockchain tracing tools. This is critical in avoiding false positive during target identification.”
The DEA document further explains that “[w]ithout this advanced tool DEA would not be unable to conduct on the spot verification of money movement” and “this is the least expensive tool on the market and has the most features for the money.” On the latter statement, no price point is given.
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