The IRS has announced an initiative to collaborate with companies capable of developing new tools that would track down criminals who are using the Monero cryptocurrency.
The tax office has allocated $625,000 for the development of a solution and it will also seek to trace transactions and potentially nefarious parties on the Bitcoin Lightning Network.
The IRS would not claim exclusive proprietorship over any of the developed products and private companies would be able to do with their tools as they place so long as they continue to provide IRS with the necessary services as per the contractual obligations.
The IRS’s request for proposals will end on Wednesday, September 16. The IRS stated the reasons behind the move, explaining that there were limited investigative resources to throw against cryptocurrencies such as Monero.
Monero is commonly associated as a facilitator of drug trafficking and other illegal operations. Ideally, IRS wants to get new tools that would allow the organisation to integrate them into existing solutions and find a way to counteract criminal activity that has been conducted clandestinely.
The first phase of the development of the needed software will require a $500,000 net investment followed by $125,000 for the second phase of testing. The initial deployment will last 120 days.
To ensure that it is working with the best supplier, the agency will pick more than one proposal, and it plans to spend around $1million to tackle crime conducted on blockchain ecosystems in the fiscal year 2020.