[ad_1]
The US Internal Revenue Service has offered a bounty of up to $ 625,000 to anyone who can crack allegedly untraceable privacy coins like Monero (XMR) and track transactions on Bitcoin’s Lightning Network (BTC).
The official proposal, released last week, says the IRS will accept proposals in the form of working prototypes until September 16. If accepted, applicants will receive an initial payment of $ 500,000.
This grant will allow applicants to develop their prototype into a working concept over the next eight months. Once the pilot test is completed and approved by the government, an additional $ 125,000 grant will be awarded.
“IRS-CI is looking for a solution with one or more contractors to provide innovative solutions for tracking and attributing private currencies, such as expert tools, data, source code, algorithms and software development services.”
The announcement sets out the initiative’s primary goals such as helping IRS Criminal Investigation, or CI, special agents track transactions – including identifying portfolios, transaction dates and times – and amounts transferred. The agency hopes to use tools to predict future transactions of tagged addresses. Final products must also provide full control of the CI, with the ability to further develop or modify them so that the organization does not have to rely on external suppliers.
Monero is one of the virtual currencies preferred by criminal organizations over more traceable crypto assets like Bitcoin. The IRS noted that XMR is being used for all future ransom requests and transactions by the Sodinokibi ransomware group due to its “privacy concerns”.
Related News: CipherTrace claims to track Monero transactions
The demand for privacy coins among crime syndicates has grown as authorities have increased their cryptocurrency capabilities and employ the expertise of private contractors like Chainalysis. In recent years, Chainalysis has been assisting law enforcement in tracking Bitcoin and other cryptocurrency transactions to successfully combat child abuse, money laundering, and terrorist financing. Last month, Chainalysis was integral to the destruction of three terrorist organizations.
Privacy coins are a key strategy for helping criminals obfuscate their transactions, with the IRS stating:
“Currently, there are limited investigative resources to track transactions involving privacy cryptocurrency coins such as Monero or other off-chain transactions that provide privacy to illicit actors.”
Blockchain analytics firm CipherTrace says it has a new tool that can track Monero transactions, though its capabilities have yet to be confirmed. The company announced that the tool, which took more than a year to develop, will be used by the US Department of Homeland Security. CipherTrace chief financial analyst John Jeffries said the tool can track stolen Monero used for illegal transactions, such as ransomware cases, to the source.
