The Pentagon is shopping around for software that can track Bitcoin and other cryptocurrencies, aiming to give law enforcement better tools for spotting criminal dealings. The move comes months after
The Pentagon is shopping around for software that can track Bitcoin and other cryptocurrencies, aiming to give law enforcement better tools for spotting criminal dealings. The move comes months after hackers hit Twitter in what officials describe as a coordinated scheme designed to steal people's bitcoin.
On July 10, the Department of Defense posted a contract request seeking a "cryptocurrency Investigative Web Based Application." The Pentagon wants a tool that would help law enforcement "identify and stop actors who are using cryptocurrencies for illicit activity such as fraud, extortion, and money laundering." The system needs to let investigators dig into the source of transactions and analyze multiple cryptocurrencies beyond just Bitcoin.
Several blockchain companies already work with federal agencies. Chainalysis and Elliptic have built their businesses around government work. Coinbase made a high-profile move this week, licensing its $124,950 blockchain analysis tool to the IRS. "We'll always look for ways to work with agencies and law enforcement to fight illegal activity," a Coinbase spokesperson said.
The Pentagon's initiative fits into a broader push by Washington to reshape how law enforcement approaches digital technology. In early March, senators introduced the "Eliminating Abusive and Rampant Neglect of Interactive Technologies Act of 2020," or EARN IT. Last month came the Lawful Access to Encrypted Data Act, known as LAED. The LAED would effectively prohibit any company from offering encryption or encrypted products unless they built in government backdoors.
The bills show a shift in how Congress views encryption. Rather than protect it, lawmakers appear bent on dismantling it. The Pentagon's crypto tracking contract accelerates that direction.
But opening backdoors carries its own risks. Once businesses install them, other actors will find them. Hackers could exploit the same pathways the government uses. With more of daily life moving online, creating those attack vectors puts millions of people at potential risk.
