Officials at HM Revenue and Customs, the United Kingdom’s tax authority, want to buy a tool that will help them track and de-anonymize transactions made with Bitcoin, Ethereum, XRP and other top cryptocurrencies.
HMRC will pay a vendor up to $110,000 to provide such a tool, which the authority hopes will provide the ability to “identify and cluster cryptoasset transactions into linked transactions and identify those linked to cryptoasset service providers,” according to a notice published on the UK government’s official website.
Notes the HMRC,
“The tool must specifically provide the following capabilities:
• De-anonymization by cluster analysis and identify confidence rating in clusters
• Attribution of a cluster/address to a known commercial entity (exchange) or a known service provider (mixing service, gambling service, dark market, etc)”
Potential vendors are required to submit bids by the end of the month. The contract will last one year, and it requires the bidder to provide training services to HMRC employees.
In addition to BTC, ETH and XRP, HMRC is also asking for the ability to track Ethereum Classic, Bitcoin Cash, Tether and Litecoin. They also want to be able to maintain that capability following any future forks that ripple out related to those assets.
Additionally, UK tax officials prefer if the vendor can set up a place to track Monero, Zcash, and Dash in the future.
HMRC claims that cryptocurrencies are being used more and more for a variety of purposes, including “international money transfers, sales of digital services, paying staff and tax evasion and money laundering.”
US regulators issued a similar initiative last year.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/QQ7