The U.S Internal Revenue Service (IRS) has issued an incentive of up to $625,000 in bounty for anyone who will develop a Monero (XMR) Tracking solution for the law enforcement agency. According to the proposal floated last week, the IRS is looking to equip its Criminal Investigation (CI) better when it comes to virtual currencies; the focus is currently on private coins like Monero and transactions on Lightning Networks. The proposal reads,
“IRS-CI is seeking a solution with one or more contractors to provide innovative solutions for tracing and attribution of privacy coins, such as expert tools, data, source code, algorithms, and software development services.”
IRS pointed out that criminal activity related to private coins, especially Monero, has been on the rise in recent years. The latest market stats show that XMR is used for around 45% of darknet activity, only second to Bitcoin. Given its surging use for illegal activity, the IRS has since been prompted to act and looking to increase its investigative resources with this challenge.
Interested participants have up to September 16 to have submitted their working prototypes, after which the selected applicants will be granted an initial $500,000. This grant is expected to facilitate further development of the working prototypes for around eight months. The final process will be pilot testing and government approval for the applicants to receive the pending $125,000.
The proposal highlights three fundamental goals of this initiative and specifically notes that all solutions must support crypto transactions that occurred this year. For starters, selected participants are expected to deliver by providing information and technical capabilities to the IRS Special agents such that they can trace Monero transactions in the near future.
Also, the underlying infrastructure should feature other functionalities like statistical likelihoods to help CI’s predict unusual patterns in private coin transactions. Last but not least, they should provide the code for their innovations and ensure that the IRS can further develop without external assistance.
“Provide algorithms and source code to allow CI to further develop, modify, and integrate these capabilities with internal code and systems with minimal costs, licensing issues, or dependency on external vendors.”
This initiative by the IRS is not the first debut of a Monero tracking solution, intelligence firm CipherTrace recently announced that it has developed Monero tracking tools for the U.S Department of Homeland Security.