All final products from applicants will be handed over to IRS CI for further development and fine-tuning. The agency is hoping the grant will result in new ways of tracing persons of interest operating within the cryptocurrency market.
In particular, Monero (XMR) is favored by criminal organizations over other currencies like Bitcoin because Monero is largely untraceable. According to the IRS, XMR has been used for ransoms demands by ransomware group Sodinokibi due to “privacy concerns.”
Criminal organizations have begun to increasingly use ‘privacy coins’ like Monero instead of Bitcoin because authorities have successfully traced criminal activity with improved crypto forensic capabilities, a prime example being the contractor Chainalysis.
Chainalysis has worked closely with law enforcement to successfully trace and prosecute human trafficking rings, money laundering operations, and terrorism financing funds. Last month, the contractor was able to assist law enforcement in tracking down and neutralizing three terrorist cells.
