IRS to task Chainalysis with tracking Monero transactions

The U.S. Internal Revenue Service (IRS) identified the winners of a contest to develop tools for tracing transactions on the Monero (XMR) cryptocurrency network, circumventing technologies that ensure anonymity. The winners were Chainalysis and Integra FEC.

Applications were accepted from September 4 to 16. The agency set aside $625 000 as payment for an effective method to circumvent technologies that ensure the anonymity of cryptocurrencies. Each winner will receive such an amount. As a result, total IRS expenditures could reach $1.25 million.

According to the competition description, the initial payment will total $500 000. These funds will go toward developing the proposed solution. If approved following testing, the company will receive an additional $125 000.

In a comment to Cointelegraph, a representative of the IRS said that 22 companies entered the competition. Their proposals underwent a comparative analysis.

Chainalysis is among the leaders in blockchain analytics and regularly secures similar government contracts.

Integra FEC is less well known, although it has obtained the right to provide “other technical consulting services” for the U.S. Securities and Exchange Commission (SEC). The contract value is estimated at several million dollars.

The IRS believes that both companies are capable of delivering functioning tools to track transactions in XMR. The contract allocates eight months for this.

In August, a similar solution for the U.S. Department of Homeland Security was presented by the analytics firm CipherTrace. The Monero community doubted whether this tool could track XMR transactions to the same extent as other cryptocurrencies.

As Forklog previously reported, Riccardo “Fluffypony” Spagni, who helped launch Monero, told in an exclusive Forklog interview about the misconceptions surrounding this cryptocurrency.

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