The US Internal Revenue Service is offering up to $625,000 to anyone who can successfully trace either Bitcoin Lightning Network or Monero transactions. Submitted last week, the request notes a rise in the number of both legal and illicit uses of such privacy-enhancing tools.
The agency stated that the goal of the bounty is to promote innovative responses to challenges facing law enforcement. It notes that the so-called Pilot IRS is very different from the way the government traditionally buys technology.
US Feds Go After Privacy-Enhancing Cryptocurrencies
As detailed by the Request for Proposal, the IRS has set a deadline for submissions to Sept 16. It also outlines a two-phase approach. Phase one will award up to $500,000 for no more than eight months of development. In this proof of concept phase, the contractor must demonstrate reliable tracking results on real-world cryptocurrency transactions for either Lightning Network or Monero. This includes sending and receiving address identification.
Growing Use of Privacy Solutions Threatens Fed Power
As part of the Request for Proposals, the IRS mentions that Monero use is growing. The agency noted that in April 2020, the Ransomware as a Service group Sodinokibi began to request future payments be made using the anonymity-focused XMR currency. The group cited privacy concerns with its former payment method, BTC, as influencing the decision. As well as a rise in the number of Monero users, the IRS highlighted the growth of the Lightning Network. The second-layer Bitcoin scaling solution not only allows for micro-transactions but further obscures the sender and receiver of transactions by only recording the opening and closing of a channel on the Bitcoin blockchain.
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Rick D.
A former professional gambler, Rick first found Bitcoin in 2013 whilst researching alternative payment methods to use at online casinos. After transitioning to writing full-time in 2016, he put a growing passion for Bitcoin to work for him. He has since written for a number of digital asset publications.
A former professional gambler, Rick first found Bitcoin in 2013 whilst researching alternative payment methods to use at online casinos. After transitioning to writing full-time in 2016, he put a growing passion for Bitcoin to work for him. He has since written for a number of digital asset publications.
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