- Two US government agencies — DEA and IRS — plan to purchase blockchain analysis software from Coinbase.
- The two firms plan to use the software in conducting investigations and combating crypto-related crime.
- It did register to offer products to the US government, which it did on April 28th.
A recently revealed public document seems to indicate that Coinbase exchange, plans to sell blockchain analysis software. However, the document also shows that the company wants to offer it to two US government agencies.
The agencies in question include the DEA (Drug Enforcement Administration) and the IRS (Internal Revenue Service). The two plan to purchase Coinbase’s licenses for an analytics platform known as Coinbase Analytics.
The documents for IRS’s purchase were published in April, while those in regard to DEA’s purchase were revealed publicly in May of this year.
What did the documents reveal?
According to the documents from the IRS, the tax authority made a connection between Coinbase Analytics and Neutrino, which is an intelligence agency that Coinbase acquired last year. The purchase drew controversy as a result of the company founder’s ties to an Italian company, Hacking Team.
Coinbase then stressed that it will part ways with anyone tied to the controversial company, but it plans to keep the intelligence agency. The IRS noted that the crypto world is evolving, and as cryptos become more accepted, criminals are starting to use coins other than BTC. This is why an analytics firm’s services are necessary to keep track of criminals’ activities.
The document says that “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.” However, the company doesn’t seem to have been granted the awards as of yet.
Coinbase could make anywhere from $10k to $250k per license
It remains unknown how much the company might earn for these licenses, although one segment of the DEA document notes that “Required for Limited Source Acquisitions Over $10,000 but not Exceeding $250,000.” While this does not specify the amount, it has at least given some range for the speculators.
As for how the agencies will use the software, the IRS’ intention is rather straightforward — it plans to secure this technology for its Criminal Investigation Cyber Crimes Unit.
The DEA, on the other hand, particularly praised Coinbase Analytics’ tools for their ability to provide investigators with identities and de-anonymization of cryptocurrency addresses. This helps track money movement and prevents false positives during target identification.
Similar use of blockchain in fighting crime was already seen in the past, in the UK.