The UK through its non-ministerial department HMRC has opened a contract seeking software that identifies cryptocurrency transactions. In particular, the UK wants to identify when the cryptocurrencies are used for gambling, tax evasion, and dark market purchases. The cryptocurrencies in question include Bitcoin, Ethereum, Bitcoin Cash Ripple, Tether, Litecoin, and Ethereum Classic. The department has also mentioned that it will favor software that can trace private coins such as Monero.
It has been no secret that cryptocurrencies are used to fund illegal activities or circumnavigate government restrictions. Some governments have chosen to ban them entirely because of this. Others have like the UK have chosen to tackle this problem head-on. Since they are unable to ban cryptocurrencies, they seek to regulate them and track them.
The Targets By UK
On Jan 17, the UK opened a contract seeking software that will trace cryptocurrency transactions for the aforementioned coins. The contract notes that the chosen software contract is worth £100K or $130K.
The software, if HMRC successful, will allow them to track tax evaders and criminals. This will be a first as other countries such as the US struggle to battle money laundering through cryptocurrencies and tax evaders. In 2019, the US government sent over 10,000 letters to its citizens warning them to pay taxes of their crypto transactions or face penalties.
Will This Help Weed Out Criminals?
For years, the crypto world has misunderstood. Those who are not involved believe that cryptocurrencies are only used to fun illegal activities. Although this narrative has change over the last few years, the myth has persisted. With this or such software that allows governments to trace when cryptocurrencies are used illegally, criminals could finally be weeded out. This would finally debunk the myth an allow the crypto space to grow in a more healthy manner.
However, there is no telling how the government will use the software. They could very well use it to spy on all cryptocurrency users. Their transactions would be logged their every move documented. Hopefully, the government can respect people’s privacy or better yet that the software can be framed not to spy on all cryptocurrency transactions.