HM Revenue & Customs: Will invest in cryptocurrency analysis technology to track related illicit transactions

The UK HM Revenue & Customs is preparing to invest up to $130,000 to develop and implement new "crypto analytics" tools to track illegal transactions related to cryptocurrency assets.

According to a recent report, Her Majesty's Revenue and Customs (HMRC) in the UK is seeking service providers with expertise in tracking crypto assets to assist tax authorities in tracing certain anonymous cryptocurrency transactions.

Criminal Activities on Blockchain

Despite the increasing legitimate use of cryptocurrencies and digital assets for lawful purposes to earn profits through their crypto assets, concerns still exist regarding the use of cryptocurrencies for illicit activities.

Due to the anonymity of transactions made possible by blockchain technology, cybercriminals and fraudsters worldwide may exploit this anonymity to achieve their objectives.

In fact, since the creation of Bitcoin in 2009, criminal activities such as illegal gambling services, dark web operations, and tax evasion have been hot topics surrounding the blockchain industry.

Therefore, HMRC, along with other government agencies such as the US SEC and CFTC, are working to enhance the security of the cryptocurrency industry. HMRC is seeking appropriate analysis tools for its FIS-DSI Cybercrime department to monitor relevant cryptocurrency transactions within the jurisdiction of the country.

Seeking Analysis Tools

HMRC stated that they are seeking crypto analysis tools to track on-chain transactions of privacy coins such as Monero and Zcash.

The report indicates that HMRC's primary current need is on-chain transaction analysis tools for mainstream cryptocurrencies, including Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Ripple, Litecoin, and USD Tether (USDT) among others. HMRC stated:

Many cryptocurrency transactions are recorded on public ledgers known as blockchains. While transaction records are typically public, the participants involved in the transactions are not.

HMRC is currently accepting proposals from tech providers until the end of January, with February 17 set as the scheduled start date for the project.

Further Reading

• Small Crypto Transactions Tax-Free! US Lawmakers Push for Crypto Tax Reform
• Uzbekistan Announces Priority Creation of "National Mining Pool" in 2020, Introduces Licensed Exchanges

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