Just yesterday, we reported on a lawsuit brought against the U.S. Internal Revenue Service for allegedly obtaining information improperly from Coinbase about its accountholders.  Now, the Block is reporting that the IRS has entered into a contract with Coinbase to use its Coinbase Analytics blockchain tracing software.  The one-year contract, for $124,950, commences on July 23, 2020.

According to the report,  the IRS had signaled its intention to buy a software license from Coinbase in April, noting in published documents that “[i]n 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.” Unsurprisingly, there has been pushback against Coinbase.  However, the company stressed that “[t]he information offered in Coinbase Analytics has always been kept completely separate from Coinbase internal data.”  And, CEO Brian Armstrong tweeted that blockchains are traceable whether his firm does the job or not. Last week, the Block reported that Coinbase had entered into a contract to provide the Coinbase Analytics tool to the U.S. Secret Service.


David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. David has been included in Chambers for his expertise in international arbitration. He is the editor of the firm's blockchain blog.