The Internal Revenue Service (IRS) is offering a $625,000 contract to any company or individual who can break Monero (XMR) or Layer 2 privacy. \u201cCurrently, there are limited investigative resources for tracing transactions involving privacy cryptocurrency coins such as Monero, Layer 2 network protocol transactions such as Lightning Labs, or other off-chain transactions that provide privacy to illicit actors,\u201d said the IRS. Therefore, the \u201cIRS-CI is seeking a solution with one or more Contractors to provide innovative solutions for tracing and attribution of privacy coins and Layer 2 off-chain transactions, such as expert tools, data, source code, algorithms, and software development services to assist their Cyber Crimes agents in carrying out their mission as it relates to cryptocurrency privacy technologies,\u201d according to the federal agency. \u201c These should support one of the outlined initiatives on Monero or Layer 2 network protocol transactions, or other cryptocurrency obfuscation technologies.\u201d The IRS plans to distribute the $625,000 contract payment in two phases; an initial $500,000 that will be paid after a proof-of-concept and initial working system is created\u2014which the contractor must complete within 8 months after the IRS accepts their proposal\u2014and $125,000 after the pilot has been tested and undergoes initial deployment.\u00a0 The IRS is accepting applications from individuals and companies who could potentially provide this service until September 16. Tracking privacy coins Just as the IRS said, there is virtually no way to track transactions involving privacy coins and tokens. For this reason, many criminals use privacy coins and tokens for illicit activities and transactions.\u00a0\u00a0 Recently, CipherTrace became the first company in the world to create a tool that can trace Monero transactions. Subsequently, the Department of Homeland Security awarded Monero a $3.6 million contract for the tool. Blockchain analytics software has been in high demand lately, it is a necessity for any digital currency service provider and may even be made mandatory in the future. Blockchain analytic tools alert their users of any suspicious transactions taking place or transactions that have originated from a blacklisted source, which is one reason why numerous government agencies have been offering contracts to blockchain analytics firms.