The United States’ Internal Revenue Service (IRS) offered anyone who could crack allegedly incomprehensible privacy coins like Monero (XMR) and track transactions on the Lightning Network with a reward of up to $ 625,000 in Bitcoin (BTC).
The official proposal published last week According to the IRS, submissions in the form of working prototypes will be accepted by September 16. If accepted, applicants receive a deposit of $ 500,000.
With this grant, applicants can develop their prototype into a functional concept over the next eight months. Once the pilot is completed and approved by the government, an additional grant of $ 125,000 will be made.
The IRS-CI is looking for a solution with one or more contractors to provide innovative solutions for privacy token assignment and tracking, e.g. B. Expert tools, data, source code, algorithms and software development services.
The announcement defines the main objectives of the initiative as Help IRS Special Criminal Investigation (CI) agents track transactionsincluding identification of wallets, date and time of transactions and amounts transferred. The agency hopes the tools will be able to predict future transactions based on tagged addresses. The end products must also give CI full control over the ability to develop or modify them so that the company does not have to rely on outside suppliers.
Monero is one of the preferred virtual currencies among criminal organizationsabout the most traceable crypto assets like Bitcoin. The IRS found that the ransomware group Sodinokibi You are using XMR for all future transaction and ransom demands because of your “privacy concerns”.
The demand for privacy tokens among criminal groups has increased as authorities broadened their crypto forensic skills and leveraged the skills of private contractors like Chainalysis.. Over the past several years, Chainalysis has helped law enforcement agencies track Bitcoin and other cryptocurrency transactions to successfully combat child abuse, money laundering, and terrorist financing. Last month, chain analysis was an integral part of the overthrow of three terrorist organizations.
Privacy coins are a key strategy to help criminals hide their transactions.
There are currently limited investigative resources to track transactions involving privacy cryptocurrencies like Monero or other off-chain transactions that provide privacy to illegal actors.
Blockchain analytics firm CipherTrace claims they have a new tool that can be used to track Monero transactionsalthough its capabilities have yet to be confirmed. The company announced that the development of the tool, which took more than a year to develop, used by the US Department of Homeland Security. Chief Financial Analyst of CipherTrace, John JeffriesThe tool can trace stolen Monero or XMR that is used for illegal transactions back to the source, for example in ransomware cases.