Coinbase has now struck a deal with the US Internal Revenue Service (IRS) for its Coinbase Analytics blockchain software.
According to the public records, available on the government database, the contract was signed on July 14 for $124,950 and will be effective from next week on July 23. It will last for a year with an option to renew for another year.
According to the IRS: “Virtual currency transactions are taxable by law just like transactions in any other property,” and taxpayers need to report such transactions on their tax returns.
“Virtual Currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value,” reads its website.
Last month it became public knowledge that the IRS and DEA were looking to buy the software license from Coinbase, which “allows for the analysis and tracking of cryptocurrency flows across multiple blockchains that criminals are currently using.”
The analytics platform was the result of Coinbase's controversial acquisition of Neutrino. Coinbase CEO Brian Armstrong recently said, “did not go very well honestly, and we had to cycle out some team members” but added that they “were able to rebuild the team, and set up this functionality in-house.”
The company has emphasized on numerous occasions that the software just compiles “publicly available data,” and they organize it to “make it more useful.”
“build relationships with law enforcement, which is important for the industry, especially if you want more fiat in the world to flow into crypto over time.”