US cryptocurrency exchange Coinbase is looking to license its blockchain analytics software to two U.S. government agencies.
According to public records, the Drug Enforcement Administration and the Internal Revenue Service are planning to buy licenses from Coinbase for a cloud-based software called Coinbase Analytics. The public documents were issued on May 18 and April 7, respectively. Industry publication The Block was first to report the news.
The DEA contract
The “period of performance” date on the DEA contract extends from April 3, 2020, to April 2, 2021.
According to the contract, Coinbase Analytics “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 positives during target identification.”
The contract also states that “this is the least expensive tool on the market and has the most features for the money.”
Coinbase could make any anywhere from $10,000 to $250,000 on the deal, according to details in the contract
The IRS contract
The IRS contract reads that the IRS criminal investigation cyber crimes unit “requires a software tool that can assist in the tracing of various types of cryptocurrency, not just Bitcoin” in support of its law enforcement investigative mission.
Neutrino—a blockchain analysis startup that Coinbase purchased last year—is specifically mentioned in the contract, which states that the tool “allows for the analysis and tracking of cryptocurrency flows across multiple blockchains that criminals are currently using.”
It goes on to add that “Coinbase Analytics also provides some enhanced law enforcement sensitive capabilities that are not currently found in other tools on the market.”
The IRS contract is for one “base year” from the date of award with one 12-month option.
When Coinbase acquired Neutrino in February 2019 for a reported $13.5 million, the move was widely criticized because of the founders’ ties to a controversial surveillance technology company called Hacking Team.
In March of last year, Coinbase CEO Brian Armstrong responded to the controversy by announcing that anyone associated with Hacking Team would be “transitioned out” of the company.