The IRS’s $625,000 Bounty On Monero

Picture this: It’s 2020, and two $625K bounties dangle on a string for any tech wizard capable of piercing through various privacy coins’ code, off-chain layer-2s, and side chains that obfuscate transactions. 

Here’s the skinny on what went down straight from the horse’s mouth (aka Uncle Sam’s digital archives):

The Mission Brief: A Request for Information dropped in mid-2020 laid it all out. The IRS’s Cyber Crimes unit wants a tool to crack the code on privacy coins, layer-2 off-chain networks, and side-chains. 

  • Privacy Cryptocurrency Coins:Monero ($XMR), Zcash ($ZEC), Dash ($DASH), Grin ($GRIN), Komodo ($KMD), Verge ($XVG), and Horizon ($ZEN)
  • Layer 2 Off-chain Protocol Networks: Lightning Network, Raiden Network ($RDN), and Celer Network ($CELR)
  • Side-chains: Plasma and OmiseGo ($OMG)

The Challenge From The IRS:

  1. Make a tool(s) for investigators that would allow them to trace transaction inputs and outputs to a specific user and differentiate them from mixins/multisig actors for Monero and/or Lightning Layer 2 cryptocurrency transactions, all while minimizing the need for external vendors. Notice how Monero was signaled out? Ya, it’s public enemy #1.
  2. Provide investigators with the tech to predict statistical likelihoods of other transaction inputs, outputs, metadata, and public identifiers.
  3. Lastly, the IRS wants the source code for the technology, allowing them to develop, modify, and integrate it with their internal systems with minimal costs, licensing issues, or dependency on external vendors.

The Outcome: Chainalysis and Integra FEC snagged the contracts, embarking on a quest split into development and testing phases. While Chainalysis later flaunted its Lightning Network tool’s prowess, Integra FEC’s achievements with Monero remain unknown.

So, did they crack Monero’s code? The silence from both winners suggests otherwise. If Integra FEC or Chainanalysis had triumphed over Monero, we’d likely see victory laps in their blog posts. Instead, we’re left with a trail of breadcrumbs leading to… well, more questions than answers.

But why was Monero selected as public enemy numero uno? Because Monero is designed to be anonymous. Zcash, Dash, and other privacy coins can be anonymous, but they also allow for transactions to have public identifiers. 

More in   Crypto

View All

Crypto News In Three Sentences – March 1, 2024

👀 Bitcoin ETFs Fly High Without Vanguard: The SEC’s nod to Bitcoin ETFs brings a seismic shift, yet giants like Vanguard ($VOO) stay on the bench, watching millions flow into these new funds. Despite Vanguard CEO Tim Buckley bowing out amid whispers of regret of not joining everyone else at the BTC ETF party, considering most of Vanguard AUM grew under Buckley, the no BTC ETF probably isn’t why. Probably. Maybe. From DailyCoin

🏦 Wells Fargo and BoA Embrace Crypto Craze: Speaking of Bitcoin ETF acceptance, Wells Fargo ($WFC) and Bank of America ($BAC) take the crypto plunge, offering Bitcoin ETFs to their daring clients. They join a financial frenzy alongside Schwab and Robinhood, contrasting Vanguard’s skeptical stance. Hey, maybe Wells Fargo will open crypto accounts for people who never asked them to? More from Cryptopolitan

Read It

Bitcoin in March: A Data Dive into Historical Performances

Here are some interesting stats on how Bitcoin performed historically in March. 📚

Bitcoin closed March in the green four times versus eight times in the red.
In the green months, Bitcoin showed off with an average percentage gain of +48.91%.
On the downside, the average percentage loss during the red months was -15.62%.

Read It

Dear. God. Those. Liquid. Ations.

When bulls get liquidated, bears get excited. When bears get liquidated, bulls get excited. 😁

I have no idea what happens when everyone gets liquidated. From Glassnode’s Liquidation Heatmap, here’s this insane look.

Read It