HMRC To Deploy Blockchain Analytics Tool To Seize Cybercriminals

HMRC To Deploy Blockchain Analytics Tool To Seize Cybercriminals

Blockchain News
January 21, 2020 Editor's Desk
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The U.K.’s tax authority, HM Revenue and Customs (HMRC) are looking to use a blockchain analytics tool that could assist it in identifying cybercriminals trading in cryptocurrencies. The tax agency wants to examine cryptocurrency transactions, such as for ether and bitcoin, which are being utilized for “tax evasion and money-laundering,” news outlet Public Technology reported
HMRC

The U.K.’s tax authority, HM Revenue and Customs (HMRC) are looking to use a blockchain analytics tool that could assist it in identifying cybercriminals trading in cryptocurrencies.

The tax agency wants to examine cryptocurrency transactions, such as for ether and bitcoin, which are being utilized for “tax evasion and money-laundering,” news outlet Public Technology reported Monday, quoting HMRC’s application for proposal document.

Specifically, HMRC is looking for a device which, at a minimum, would help trace seven digital assets – bitcoin (BTC), bitcoin cash (BTC), ether classic (ETC), ether (ETH), XRP, litecoin (LTC) and Tether (USDT) stablecoin.

HMRC would also favor a tool that could improve the ability to track privacy-oriented coins like Zcash (ZEC), Monero (XMR), and Dash (DASH), per the report.

The tax agency is ready to contribute £100,000 ($130,000) toward licensing for the preferred tool. It is inviting bids from potential suppliers until January 31 and looking to commence a contract on February 17.

Blockchain analytics firms Elliptic, Chainalysis, and CipherTrace could be some of the possible suppliers as these firms help trace crypto transactions. U.K.-based Elliptic, for example, lately found over $400 million worth of XRP transactions related to illicit activities like scams and Ponzi schemes.

“Many of these crypto-asset transactions are recorded publicly in a ledger known as a blockchain. While the transactions are typically public, the participants undertaking them are not,” HMRC was cited as saying in Monday’s report.

The tax agency is, hence, investigating the “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.”

Last August, HMRC was also demanding consumer and transaction data from crypto exchanges eToro, Coinbase, and CEX.IO. The tax agency had sent out letters to these exchanges requesting consumers’ names and transaction records, saying that “these transactions may result in potential tax charges and HMRC has the power to issue notices requiring exchanges to provide this information.”

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