IRS To Reward Whoever Can Track Monero Transactions

The IRS will pay $500,000 to the selected applicant to build out a working system from an early prototype, with eight months to complete development. Once the agency tests the finished product, it pays another $125,000 if everything meets requirements.

The Criminal Investigation division at the IRS wants tools that can track transactions tied to addresses agents have already flagged and monitor what moves through those addresses next. Investigators must have full control over the approved system—the ability to modify it, expand it, adjust it for different investigations. Right now the IRS pays outside contractors for crypto forensics. The agency wants to build this capacity in-house instead.

Monero has become the preferred currency for criminals because it is harder to trace than Bitcoin. The ransomware gang Sodinokibi has been demanding payments in Monero for months. As law enforcement has gotten better at crypto forensics, criminal groups have moved faster toward Monero adoption. Blockchain analysis firms like Chainalysis have been helping law enforcement investigate terrorism financing, money laundering, and child abuse. The company played a role in dismantling three terrorist groups last month. CipherTrace, another forensics outfit, announced it had built a tool for tracing Monero transactions, though its capabilities remain unproven.