IRS Wants to Break Privacy on Monero and Bitcoin’s Lightning Network

2020-9-11 05:33

The Internal Revenue Service is seeking a tool that can be used to trace privacy coins like Monero, according to a request for proposals published by the U.S. agency last week.

Tracing Monero-Aided Criminals

The IRS says that there are already many monitoring tools for public blockchains such as Bitcoin and Ethereum. At the same time, there are “limited investigative resources for tracing transactions involving privacy cryptocurrency coins such as Monero.”

The IRS puts special emphasis on Monero, which it says is increasingly being used by criminal and ransomware groups such as Sodinokibi. However, it is also seeking ways to trace transactions on second-layer networks like Bitcoin’s Lightning Network, which also provides some transaction privacy.

The tracking tool is meant to help investigate “theft, narcotics trafficking, money laundering, terrorist financing, sex trafficking, and child prostitution.” Contractors that provide a tracing tool will need to accomplish three goals: they will need to provide a way to trace transactions based on inputs and outputs, provide statistical predictive tools, and provide a system that can be modified further—all with minimal involvement from third-party vendors.

The IRS is offering $1 million in total for solutions with the potential to crack the security on Monero and the Bitcoin Lightning Network. It is offering up to $500,000 to contractors that provide a proof-of-concept and working system, and up to $125,000 for solutions that make it to the testing stage.

Why Not Use CipherTrace?

The timing of this news is notable: the IRS has published its request just weeks after the U.S. Department of Homeland Security (DHS) obtained a Monero tracing tool from CipherTrace.

It is not clear why the IRS does not plan to use that tool. The IRS may simply have bureaucratic reasons for seeking a new tool. In its request for proposals, the IRS says that it determines its particular needs then determines which contractor can provide a solution for the best price. This process seems to have begun in June.

That said, the need for a second tool can also be seen as evidence that CipherTrace’s tracing tool is not that effective. When used correctly Monero’s privacy scheme appears to be unbreakable—for the time being.

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monero privacy according request like trace used

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Monero (XMR) Future Price Prediction 2019 – Leading Privacy Coin To Reach 3 Digits Again?

When Monero launched, conversations around Bitcoin’s on-chain privacy features caused a spree of privacy-focused projects to enter the digital asset market. Originally named Bitmonero, Monero emerged as a privacy-focused cryptocurrency based on CryptoNote, a reference implementation for new altcoins many of which were later exposed as fraudulent projects.

2019-3-13 00:30


Технология Mobius способна наделить эфириум анонимностью Monero

На конференции по вопросам повышения конфиденциальности (Privacy Enhancing Technologies Symposium) в Барселоне два исследователя представили технологию Mobius, которая скрывает информацию о транзакциях эфириума.

2018-7-30 09:47


Фото:

Privacy Coins Are ‘One of the Greatest Emerging Threats to U.S. National Security,’ States US Congressman

The U. S. Secret Service is taking a good look at privacy-focused cryptocurrencies like Monero and Zcash while urging Congress to “consider additional legislative or regulatory actions. ” Fear of Privacy Coins Last week, a top official from the federal law enforcement agency reportedly requested help from Congress in combating the use of privacy coins for illicit purposes.

2018-6-24 14:00


Фото:

Congress assistance sought by US Secret Service to stop illicit usage of privacy coins

Privacy The US Secret Service is worried about the illicit use of cryptocurrencies. Asking Congress for Help In his testimony, Novy asked “Congress for help in preventing cryptocurrencies like monero and zcash, which provide users with enhanced privacy and anonymity features, from being used for illicit purposes,” Forbes elaborated. According to Forbes, Greg Nevano, an

2018-6-24 21:28


When Moon(ero): The Mystery of Monero’s Declining Price

The popular privacy coin has been one of the worst performers in the past month, especially since the pullback in early May. It has been steadily dropping in BTC value since late April, and it raises the question, why? Privacy Isn’t Selling, Apparently Monero is a staple in the cryptocurrency community, where most people involved in the space have, at the very least, a modicum of respect for the project.

2018-6-16 10:00


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