The United States Internal Revenue Service (IRS) has encouraged tech firms to help create new software that would further enable the IRS to monitor cryptocurrency transactions, reported Bank Info Security. This is part of efforts to halt cybercrime associated with cryptocurrency usage.
The IRS is now offering grants of up to $625,000 to tech companies to help the body create new innovative ways to monitor the usage of cryptocurrency and any malfeasance attached to cryptocurrency in the country. This comes as the IRS hopes to increase its fight against money laundering, fraud, and other cybercrimes.
Meanwhile, the IRS reported that it is placing more emphasis on less popular cryptocurrencies. Cybercriminals tend to avoid more popular ones such as Bitcoin due to monitoring through the blockchain.
Tokenpost further reported that the body is inviting submissions of software prototypes to aid it in the battle against cybercrime. The IRS is specifically calling for tech developers to create software to monitor less traceable privacy coins such as Monero and other coins traded on the Bitcoin Lightning Network. The deadline for submissions is 16 September 2020. Any applicants accepted will receive $500,000 initially. Afterwards, the proposed software must successfully pass a pilot test. The applicant will then receive a further $125,000 in remuneration after the software gains approval by the government.
The IRS stressed that the use of privacy coins requires great attention. These are becoming more and more popularly used, especially by those engaged in illicit cybercrimes. The body further noted that there has not been enough investigation and software developed to aid in the fight against these more obscure cryptocurrencies.
The IRS recently extended tax regulations to cryptocurrency users in the United States in response to rampant tax avoidance.