The UK’s taxman wants a blockchain solution to find cybercriminals

Cryptocurrency isn’t inherently bad, although there are some that would use it for nefarious deeds – just like they would fiat.  The tax authority in the UK, HM Revenue and Customs (HMRC), wants a better tool to locate cybercriminals dealing in BTC, Ether (ETH) and others and is exploring the possibility of using a blockchain-based analytics tool that can identify and track cryptocurrency trades that are linked to digital thieves.  It is now accepting proposals from entities that might be able to offer the ideal solution in hopes to continue to make its job a little easier. 

According to a report by Public Technology from yesterday, HMRC recognizes that crypto has its positive traits, but that not everyone is as morally or ethically sound as they should be.  In order to find those that might be using crypto as a means to evade paying taxes or to launder money, it is considering the blockchain, and explains, “Many of these crypto-asset transactions are recorded publicly in a ledger known as a blockchain.  Whilst the transactions are typically public, the participants undertaking them are not.”

To help in its goal, it wants a “provision of a tool that will support intelligence-gathering methods to identify and cluster crypto-asset transactions into linked transactions and identify those linked to crypto-asset service providers.”  The solution has to use cluster analysts that will be able to link transactions to specific entities or service providers, including those that offer gambling, dark-web and mixing solutions.  It needs to be able to track BTC, ETH, Bitcoin Cash, Ether Classic, XRP, Litecoin and Tether and, if possible, Monero, Zcash and Dash. 

For anyone that believes they have the ideal solution, HMRC is ready to pay £100,000 ($130,000) for an annual license, with the possibility of having the license renewed.  Proposals are now being accepted and must be submitted by January 31.  After that, a choice will be made, and the contract is expected to start as of February 17. 

In order to qualify for a contract submission, HMRC adds, “The successful service provider must have relevant people, suitable assets, and deep experience.  Critically, we will be looking for vendors to showcase their capabilities by demonstrating their expertise in the field of crypto-asset tracing.”

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