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The US Department of Homeland Security (DHS) wants to know if it is possible to track transactions conducted using private currencies. This is according to a pre-solicitation paper which was published on November 30 by the DHS Small Business Innovation Research Program. The report also discusses the use of cryptographic coins like Bitcoin for transactions.
DHS suspects that private money is used for criminal activities
Because of their anonymous nature, DHS suspects that privacy-focused currencies are used for criminal activities. For this reason, the department is trying to figure out if it can conduct forensic analysis on transactions involving anonymous cryptocurrencies.
The document also discusses the use of coins like Bitcoin for transactions. Although the report focuses on the ability to trace anonymous transactions, note that there is a commercial and government use for cryptocurrencies.
The document explicitly highlights how platforms such as Monero and Zcash emphasize privacy and other characteristics of anonymity. Two factors that make it difficult to determine where a transaction came from or how much was done.
The paper notes that while both of these characteristics are desirable, there is an irresistible desire to track and understand any illegal transaction and action on the blockchain.
An extract of the document reads:
"This proposal requires solutions that allow law enforcement investigations to perform forensic analysis on blockchain transactions.This analysis can be addressed in various ways and may consider cases of using different data situations depending on whether additional data are available from out-of-chain sources. "
Although the document predominantly uses Monero and Zcash as examples, it also seeks a solution that will address other similar projects that will be presented in the future. So any proposed solution will have to "Providing work approaches for dealing with new blockchain implementations."
For now, the document states that it is neither a request for proposals nor a solicitation, so the agency is not necessarily looking for any solution for now.
However, interested parties can go ahead and contact the authors of subjects until December 18. Look for a comment or ask technical questions.
In conclusion, the document notes that the actual solicitation should be issued on 19 December.
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