The United States tax agency has published a request for
information pertaining to privacy-centric cryptocurrencies and
technologies that obfuscate crypto transactions. The IRS-CI Cyber Crimes
Unit request is also asking for information in relation to “layer two
offchain protocol networks, sidechains, and the Schnorr Signature
algorithm.”
A recently published IRS-CI Cyber Crimes Unit request that’s available for public viewing
is requesting information from “industry partners” in regards to crypto
assets that leverage privacy techniques and other types of protocols
that hide transaction data. The Request for Information (RFI) was
published on June 30, 2020, and the RFI is dubbed “Pilot IRS
Cryptocurrency Tracing.”
The IRS-CI request states:
This
RFI is associated with a pilot IRS Criminal Investigation Division (CI)
program. CI Cyber Crimes is requesting information about systems that
will allow developers and testers to conduct investigative research of
distributed ledger transactions involving privacy cryptocurrency coins.
The privacy-centric crypto tokens mentioned in the IRS-CI request include “monero (XMR), zcash (ZEC), dash (DASH),
grin (GRIN), komodo (KMD), verge (XVG), and horizon (ZEN). Alongside
this, the IRS wants data concerning offchain networks and sidechains
like “Lightning Network (LN), Raiden Network, Celer Network, Plasma,
Omisego,” and coins that have integrated the Schnorr Signature algorithm
like bitcoin cash (BCH).
The
United States tax agency says the entity currently has little knowledge
of these protocols and is looking to build its expertise. The IRS would
also like to leverage applications that allow them to investigate these
privacy tools and coins.
“Acquiring applications to allow an
investigation to more easily trace privacy coins and other protocols
that provide anonymity to illicit actors would allow investigations to
be more effective, as well as facilitate a higher level of deterrence by
making it harder to conceal criminal activity. It also provides an
investigative efficiency that is currently limited,” the IRS request
notes.
Similarly,
there are only a “few investigative resources” that allow investigators
to intercept or trace transactions involving “Layer 2 network protocol
transactions [and] sidechain ledgers.” Including “distributed ledgers
that are adopting signature algorithms that provide privacy to illicit
actors.”
The IRS notes in the request that the use of privacy
coins and offchain/sidchain networks are “becoming more popular for
general use.” But also the tax agency is “seeing an increase in use by
illicit actors.”
source link : https://news.bitcoin.com/irs-requesting-information-privacy-centric-cryptocurrencies/
