December 06, 2018 | AtoZ Markets- Recently, the US Department of Homeland Security (DHS), posted a new document titled “Small Business Innovation Research (SBIR) 19.1 Pre-Solicitation” which contains plans on the cryptocurrency tracking.
DHS plans 3 Phases of Crypto Tracking
DHS which manages a border control, terrorism, cyber-crime, and disaster management as the branch of the American government, intends to arrange a system to monitor anonymous cryptocurrencies Monero and Zcash. According to the U.S. federal agency officials, the proposals regarding new document are open to consultation until the 18th of December. The new DHS paper consists of 3 phases of the cryptocurrency research.The first stage of the DHS plan involves designing a blockchain analysis ecosystem to enable forensic analysis for homeland security law enforcement applications to monitor the usage of Zcash and Monero. The second phase covers prototyping and demonstrating of the blockchain forensic technologies already designed, in which a number of representative transactions would be analyzed. The third phase is related to the implementation of cryptocurrency. It involves tracking applications for governmental and commercial uses in anti-money laundering activity and during law enforcement operations.
Cryptocurrency transactions are not entirely private in reality
It is a broadly known fact, that cryptocurrency transactions are anonymous, in reality, all the contents of crypto wallets are open to public view. Cryptocurrency transactions are openly recorded and cannot be deleted, although the identity of the owner of a wallet need not be disclosed.
The first Bitcoin transactions tracking product named Crystal appeared in January 2018, was designed by San Francisco-based blockchain software company BitFury. Crystal allows law enforcement to detect suspicious behavior on the blockchain and determine wallet ownership, providing evidence that can be used in court.
Monero is an open-source decentralized cryptocurrency created in April 2014 which focuses on fungibility and privacy. It used an obfuscated public ledger, meaning anybody can broadcast or send transactions, but no outside observer can tell the source, amount or destination.
Zcash was developed and launched in 2016. It has strong privacy features, transact efficiently and safely, with low fees, while ensuring digital transactions remain private. Both cryptos were established due to the market demand for anonymity.
Another cryptocurrency, XRP offers users the option of hiding transaction amounts, creating stealth addresses, and obfuscating the path of a transaction. The experts note, that illegality is not the only reason that someone might have for wanting to hide their transactions. Avoiding the taxman could be a reason, as could believe in the principle that a person should be able to exchange their money without being followed. However, nowadays, when the blockchain-based businesses attract more big-money investors, anonymous coins begin to stand out as being in defiance of existing financial law. As a result the new U.S. cabinet department proposal calls for solutions that enable law enforcement investigations to perform forensic analysis on blockchain transactions. According certain media resources, in September a group of US government agencies led by the IRS has awarded several contracts worth millions of dollars to blockchain monitoring firms like Chainalysis as part of this effort.
Think we missed something? Let us know in the comments section below.