Steven ZeniosHM Revenue and Customs (HMRC) is looking to deploy a blockchain analytics tool that could help in identifying cybercriminals who trade in cryptocurrencies.
HMRC’s proposal stated that the agency wishes to analyse crypto transactions that are being used to avoid tax and launder money with the new technology of the tool.
The tool will look at a minimum of seven cryptocurrencies including Bitcoin (BTC), Bitcoin cash (BCH), Ether (ETH), Ether Classic (ETC), XRP, Litecoin (LTC) and Tether (USDT) stable coin. In the future, the HMRC would like to develop the tool to analyse privately oriented crypto coins such as Monero (XMR), Zcash (ZEC), and Dash (DASH).
The budget to license the tool is £100,000 ($130,000), HMRC is inviting proposals to potential suppliers and developers until January 31st with the goal of starting a contract in the 17th February.
Some potential developers and suppliers could be blockchain analytics firms Chainalysis, Elliptic and CipherTrace.
HMRC commented in the report:
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.
Due to this, the report went on to say it is seeking 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.
This is not the HMRC’s first encounter with crypto exchanges, not long ago the HMRC demanded from crypto exchanges Coinbase, eToro, and CEX.IO customer history and transaction information. HMRC stated 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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