Twitter hack alarms top executives? Pentagon seeks blockchain analysis tools, Coinbase: undecided on bidding

Last week, a massive hacking incident on the mainstream social media platform Twitter involved numerous high-profile accounts. The hackers not only targeted accounts of many well-known individuals but also specifically mentioned Bitcoin, making it the focus of international attention in recent days. The hacked accounts even included political figures such as former U.S. President Obama and presidential candidate Biden. In response, the FBI has launched an investigation, and now the Pentagon is seeking blockchain analysis services in an attempt to trace all suspicious transactions.

Covering Bitcoin and Other Top Cryptocurrencies

According to a statement released on July 10th, the U.S. Army Criminal Investigation Division Command (USACIDC) is seeking blockchain analysis tools to assist in tracking illegal cryptocurrency transactions.

Back in late July of last year, the Army Contracting Command-New Jersey (CC-NJ) in the United States had already issued a solicitation, outlining the following requirements for service providers:

• Cloud-based solution requiring no hardware support
• Track real-time Bitcoin and other cryptocurrency transactions
• Identify transaction patterns and interactions with other transactions
• Provide visual analysis tools for data analysis
• System uptime must reach 99.7%
• Available for government use 24/7 throughout the year

The document emphasizes that this service must help law enforcement agencies identify and prevent illegal activities such as ransom, fraud, and money laundering conducted with cryptocurrencies, as well as identify transaction origins and provide analysis of Bitcoin and other top cryptocurrencies for investigative tasks conducted by the USACIDC.

Furthermore, the analysis tool must have global reach, providing network access for cryptocurrency investigations. Interested analysis service providers must submit their responses by July 20th.

Blockchain Analysis Firms Working with Governments

Well-known blockchain analysis firms such as Chainalysis and Elliptic, headquartered in London, focus on analyzing on-chain data, illicit fund flows, and providing data services that comply with global regulatory requirements. They have contracts with the Internal Revenue Service (IRS) in the United States and provide data analysis to cryptocurrency exchanges and financial institutions.

Recently, the major U.S. exchange Coinbase faced backlash from users and the crypto community for reportedly selling "Coinbase Analytics" to the U.S. government at a discounted price, with critics claiming it compromises user privacy data.

Although Coinbase CEO Brian Armstrong stated that blockchain analysis tools have been around for years, and the government cooperation was merely to recoup the acquisition cost of Neutrino, The Block's Research Director Larry Cermak is skeptical, believing that Coinbase is engaging in price competition, with the four-year contract in the solicitation being only $184,000, serving as lobbying costs for a smoother future listing.

According to Forbes, Coinbase responded in an email that they are aware of USACIDC's needs but have not decided whether to participate in the bidding process, stating:

We will continue to work with institutions and law enforcement to seek various ways to combat illegal activities.