Cryptocurrency analytics firm, Chainalysis, and forensics firm Integra have sealed a one-year contract with America’s Inland Revenue Service (IRS) to find out how to trace wallet addresses and payments of privacy coins such as Monero.
The award notice for the engagement was given in September. Both firms were given $500,000 each to create tracing tools. They have been given eight months to give a working submission and will receive $125,000 if their solutions are successful and approved.
The IRS aims for the firms to create solutions that track transactions to a specific user, identify specific transaction details and provide specific information on network activity.
“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.”
While the feat may seem impossible, Chainalysis previously said that it could track 99% of transactions involving Zcash and almost all of Dash’s coins- coins that are considered to be untraceable.
Chainalysis is one of the top firms in the cryptocurrency analytics space with a track record of providing different government agencies insights on the cryptocurrency sector. Integra, the lesser-known firm also has a track record of successful contracts in the cryptocurrency space with big names such as the Securities and Exchange Commission.
The spread of cryptocurrency awareness among government agencies over the years has enabled more agencies to create new strategies to get tax revenues from cryptocurrency users and organizations. While many of their attempts have fallen short, they continue to collaborate with private firms to deepen their influence in the landscape.
Fortunately for organizations and users in the cryptocurrency space, there are opportunities to legally save on taxes. Organizations and individuals have been able to register entities in different nations in order to legally save money on taxes.