UK tax service intends to fight cybercriminals through monitoring blockchain

The UK Tax Office is looking for companies that can provideanalytical tool that will help you identifycybercriminals trading cryptocurrencies. With its help, the Tax Service intends to analyze cryptocurrency transactions that are used for “tax evasion and money laundering.”

In particular, the department is located insearching for a tool that could track at least seven digital assets – Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), XRP, Litecoin (LTC) and stablecoin Tether (USDT).

In addition to these cryptocurrencies, the authority is particularly interested in privacy-oriented coins such as Monero (XMR), Zcash (ZEC) and Dash (DASH).

To license this tool, the Tax Servicethe service is ready to allocate £100,000 ($130,000). Submission of proposals by companies is open until January 31. Potential suppliers include analytics firms Blockchain Chainalysis, Elliptic and CipherTrace, as the firms help track crypto transactions.

Most Cryptocurrency Transactionsare recorded on a public ledger known as a blockchain. While transaction data is typically public, the parties involved are not, – the Internal Revenue Service said in a statement.

Therefore, the tax authority is looking for a “tool,which will support intelligence-gathering methods for identifying and clustering cryptocurrency transactions and identifying those associated with cryptocurrency service providers.

Let us recall that in August last year the regulatorrequested customer and transaction information from cryptocurrency exchanges Coinbase, eToro and CEX.IO. So, the IRS sent out a mailing asking for customer names and transaction histories, noting that “these transactions may potentially be subject to tax, and the IRS has the authority to issue notices requiring exchanges to provide this information.”