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Tuesday, December 4, 2018

Blockchain Spies: The US Government sets out to take the privacy out of 'privacy coins'...

I have to admit, the timing seems odd.  Earlier this year I published an article in response to the DEA sharing their findings on cryptocurrency titled "DEA Special Agent: 90% of crypto transactions used to be for illegal purposes - today that number is just 10%."

But even with illegal cryptocurrency usage at an all-time low, and more legitimate entities entering the market every week, the US Department Of Homeland Security sees the small number of bad apples as a priority.

Perhaps, just to 'get in front' of a problem, before it even becomes one.

A just-released document on the DHS website invites private businesses to contact them if they believe they can help when it comes to finding solutions to the problems they outline within.  One section of this document dedicated to blockchain is titled "Blockchain Applications for Homeland Security Forensic Analytics".

They begin by mentioning two of the top privacy coins by name:

"This proposal seeks applications of blockchain forensic analytics for newer cryptocurrencies, such as Zcash and Monero."

They explain their reasoning as:

"A key feature underlying these newer blockchain platforms that is frequently emphasized is the capability for anonymity and privacy protection. While these features are desirable, there is similarly a compelling interest in tracing and understanding transactions and actions on the blockchain of an illegal nature." 

If a person or company thinks they can do it - they'll need to explain how, build a prototype, and then show it in action.  Pull it off - and you'll land a valuable government contract.

Now the question is - how private are those privacy coins?  The motivation to find holes in their security just got a lot stronger.
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Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk