Today in Crypto: Pentagon Hires Inca Digital to Research Crypto Risks; JPMorgan Lowers Coinbase Price Target

The Defense Advanced Research Projects Agency (DARPA) has hired Inca Digital, a digital asset data and analytics provider, to look into cryptocurrency risks to national security.

DARPA, the research and development agency of the U.S. Department of Defense, will look into activity related to the financial applications of distributed ledgers, CoinDesk reported Friday (Sept. 23).

The agency gave Inca Digital a Phase II Small Business Innovation Research (SBIR) for the issue, with which Inca will develop a crypto ecosystem mapping tool to analyze risk from crypto.

That will help both the U.S. government and the private sector understand how crypto could be connected to crimes like money laundering, terrorist financing and sanction evading. It will also see how crypto affects traditional finance systems and vice versa, per the report.

Meanwhile, the Brazilian Federal Police have begun raids on six crypto exchanges.

While the names of the exchanges weren’t listed, CoinDesk wrote Friday, the investigation is looking into tax evasion and money laundering where crypto was involved. Operation Colossus, which was done alongside the Brazilian tax authority, will carry out 101 warrants from a criminal court in São Paulo.

The police have also ordered a freeze on around $238 million in assets and securities held by those under investigation, and the report noted there were 28 exchanges under investigation that held an undisclosed amount of virtual assets.

Furthermore, bitcoin and various other cryptocurrencies fell in value on Friday, with investors still dropping as the Federal Reserve has promised to stay aggressive fighting inflation.

Bitcoin fell by 3.7% during the session, and ether, the second largest, was down 4.7%, Bloomberg reported. The mood has been dour for a while now as the Fed and various other central banks around the world have raised interest rates to try and fight price increases.

Finally, J.P. Morgan’s North American equity team has lowered its price target for Coinbase Global shares from $78 to $60 for December.

The crypto exchange gets most of its revenue from U.S. crypto trading levels, meaning the third and fourth quarter earnings hinge on crypto trading interest.

“We think pressure on Coinbase revenue from falling cryptocurrency markets will pressure the stock price,” J.P. Morgan analysts wrote, per a Yahoo Finance report.

According to analysts, Coinbase is likely to see low trading volume from U.S. retail crypto investors through December, but it could pick up in the first quarter of next year.

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.