- The IRS want to trace Monero transactions, which – unlike Bitcoin – are entirely private
- Cracking Monero could help the IRS trace those who have avoided paying tax, and assist in criminal investigations
Do you think you can crack Monero’s layers of privacy? The IRS would like to hear from you.
Monero (XMR) is a famously privacy-centric cryptocurrency, with features built into it from its inception that claim to make transactions untraceable and completely private, hiding the details of movements of digital cash from prying eyes. Completely private by default, Monero is a lot more private than many other cryptocurrencies such as Bitcoin.
And that, of course, has not only made it a popular digital currency for criminals operating on the darknet, it’s also made it a focus of interest for law enforcement agencies and tax-enforcement authorities such as the United States Internal Revenue Service (IRS).
Proof of that is demonstrated by a scheme called “Pilot IRS Cryptocurrency Tracing” that the agency is hoping to run, looking for ways to crack Monero’s privacy and make it easier for them to investigate transactions made through the cryptocurrency.
According to the IRS’s call for contractors they are looking to share a total of $625,000 to “one or more contractors” who assist them in their goal to break Monero, other anonymity-enhanced cryptocurrency, or Lightning or other Layer 2 off-chain cryptocurrency protocols.
The first part of the payment (a mere $500,000) will be paid if a successful proof-of-concept is delivered, demonstrating how Monero transactions can have their privacy stripped away from them.
An additional $125,000 will apparently be given to whoever the lucky person is after the technique has passed a full examination and has