The UK’s tax authority has issued a request for proposals for ‘cryptoasset analysis tooling’ to deal a blow to cybercrime.
The move is backed by a £100,000 budget, although the expectation is a subscription by user basis will be applied. This may prove problematic as the current marker leaders charge on variations of a per-check basis.
The move is inevitable, but perhaps fast-tracked due to the lack of information received while approaching digital asset exchanges for information on customers and transaction histories in an effort to identify and tackle criminal activity. With may exchanges based overseas, one would question how much information they received, so it makes sense HMRC would look to proactively invest in a took to indecently conduct investigations.
HMRC has noted the tool must “support intelligence-gathering methods to identify and cluster Cryptoasset transactions into linked transactions and identify those linked to Cryptoasset service providers” and provide the following capabilities:
3.1.1 De-anonymization by cluster analysis and identify confidence rating in clusters
3.1.2 Attribution of a cluster/address to a known commercial entity (exchange) or a known service provider (mixing service, gambling service, dark market, etc)
3.1.3 Software supplier to be able to produce on request a statement regarding why and how they have attributed activity to a specific entity. (primary evidence will remain from Open source block explorers and corroborating evidence from exchanges; however, complex/edge cases may require supporting statement from the vendor)
3.1.4 Web based access, visualisation and analytics of Blockchain transactions using proprietary data to enhance existing blockchain and open source derived data to progress identification of suspects, activity, and build intelligence.
3.1.5 The ability to track and trace, and for the tool to maintain this capability following any forks or other underlying currency change, for the following Cryptoassets as a minimum: –
Etherium, Etherium Classic, Bitcoin, Bitcoin Cash, Ripple, Tether, Litecoin, Preferable requirement – plans to develop capability for Monero, Zcash, Dash
3.1.6 The supplier to provider quality end user training delivered locally or remotely.
3.1.7 Secondary Training modules available via remote on demand delivery
3.1.8 HMRC requires all bidders to ensure that in the event they are successful in this competitive procurement exercise, no conflict of interest between this tool and any other services being supplied currently, or in the future, shall arise.
The request notes the minimum terms for the contract will be twelve months and the successful applicant must “have relevant people, suitable assets, and deep experience.”