The IRS named the winners of the tender for a solution for tracking transactions in cryptocurrency networks with increased privacy. These are the Texas-based company Integra FEC and Chainalysis known for its collaboration with American government agencies.
The IRS signed two contracts worth $625,000 in total to develop a solution for tracking transactions in privacy-enhanced cryptocurrency networks such as Monero and second-layer network protocols such as Lightning. The winners are blockchain analytics firms Chainalysis and Integra FEC.
“Currently, there are limited investigative resources for tracing transactions involving privacy cryptocurrency coins such as monero, Layer 2 network protocol transactions such as Lightning Labs, or other off-chain transactions that provide privacy to illicit actors,” the IRS contract offer reads.
During the tender, the tax service received proposals from 22 development firms.
American tax authorities are interested in both systems that identify data on users of Monero wallets, dates and sizes of transactions on the network, as well as more sophisticated tools that can statistically predict the likelihood of future transactions involving certain wallets.
The winning team will be required to provide “weekly progress reports” and interact with CI Cyber Crimes members and dedicated cyber agents. “All developed documentation, data, source code and software must be provided to the IRS-CI.”