Can you track Monero? The IRS offers a high reward for you to claim

The Internal Revenue Service (IRS) in the United States announced last week that anyone who can provide a solution to effectively break the privacy features of Monero will be eligible to receive a maximum reward of $625,000.

High Reward Offered for Solution

The United States Internal Revenue Service (IRS) announced on September 4th an official notice seeking solutions for tracking Bitcoin (BTC) transactions on the Lightning Network and transactions involving privacy coins like Monero (XMR). According to the announcement, the primary objective of this initiative is to assist IRS Criminal Investigation (CI) agents in tracking transactions, including identifying wallets, transaction dates and times, and transfer amounts. Additionally, the IRS stipulated that the product must be entirely independent, giving CI complete control over the product with no ability for further development or modification.

Anyone can submit a solution by September 16th, and if the submitted solution is accepted, the applicant will receive an initial payment of $500,000.

Over the next eight months, applicants can continue to refine their concepts and develop a working prototype. Once submitted and approved for testing by the authorities, the applicant can earn an additional $125,000.

Privacy Coins Used for Criminal Activities

Privacy coins like Monero have become the cryptocurrency of choice for cybercriminals, with a higher percentage of illicit use compared to other traceable cryptocurrencies like Bitcoin. The IRS noted that current resources for tracking privacy features such as Monero or the off-chain transactions of other privacy-focused coins are limited, making these tokens the primary tool for obfuscating transactions:

Previously, there have been reports of hacker attacks in European countries such as the UK, Germany, Switzerland, and Spain, where attackers allegedly exploited leaked SSH (Secure Shell, encrypted network protocol) credentials to compromise supercomputers for mining untraceable Monero (XMR). Additionally, the IRS highlighted that Monero has been a primary tool for ransom payments by ransomware groups like Sodinokibi.

Tracking the flow of privacy coins is not a far-fetched idea. In fact, blockchain analysis company CypherTrace announced at the end of August this year that they had developed the world's first tool capable of tracing Monero transactions. CypherTrace claims that it took over a year to develop this tool, which is now fully utilized by the U.S. Department of Homeland Security (DHS).