The IRS offers a $625,000 bounty to anyone who can break Monero and Lightning – CointelegraphSeptember 11, 2020
The United States Internal Revenue Service has offered a bounty of up to $625,000 to anyone who can break purportedly untraceable privacy coins such as Monero (XMR) as well as trace transactions on Bitcoin’s (BTC) Lightning Network.
The official proposal, published last week, says the IRS will accept submissions in the form of working prototypes until Sept. 16. If accepted, applicants will receive an initial payment of $500,000.
This grant will allow applicants to develop their prototype into a working concept over the next eight months. Once the pilot test is completed and approved by the government, a further $125,000 grant will be awarded.
“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.”
The announcement defines the initiative’s primary objectives as helping IRS Criminal Investigation, or CI, special agents to trace transactions — including identifying wallets, transaction dates and times — and amounts transferred. The agency hopes to use the tools to predict the future transactions of flagged addresses. The final products must also provide CI full control, with the ability to further develop or modify them so that the organization does not have to rely on any external vendors.
Monero is one of the virtual currencies preferred among criminal organizations over more traceable crypto assets like Bitcoin. The IRS noted that XMR is being used for all future ransom demands and transactions by ransomware group Sodinokibi due to its “privacy concerns.”
Demand for privacy coins among criminal syndicates has grown as authorities have increased their crypto forensics capabilities and employ the skills of private contractors such as Chainalysis. In recent years, Chainalysis has assisted law enforcement in tracking Bitcoin and other cryptocurrency transactions