U.S. Department of Homeland Security interested in tracking privacy-focused cryptocurrencies

The U.S. Department of Homeland Security (DHS) is interested in applications of blockchain forensic analytics, a new pre-solicitation notice has revealed.

The pre-solicitation notice has been published by the DHS Small Business Innovation Research Program. It noted that the previous efforts that addressed Bitcoin analytics covered only a “limited scope” within the crypto space. The document states:

“This proposal seeks applications of blockchain forensic analytics for newer cryptocurrencies, such as Zcash and Monero. And, ongoing research within the field also contributes to new technological implementations and techniques that continue to multiply the specific types of consensus, privacy, security, and proof mechanisms.”

It said that these new blockchain platforms, with their key features of anonymity and privacy protection, make it difficult to trace transactions. This is a key area of concern for financial authorities around the world as it becomes difficult to track the details in case of illegal transactions.

“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,” the notice reads.

On these lines, the proposal is seeking solutions that enable law enforcement investigations to perform forensic analysis on blockchain transactions.

“This analysis can be approached in any number of ways and may consider different data situation use cases depending on whether additional data from off-chain sources are available. Furthermore, with the proliferation of new blockchain variants, the desired solution should either attempt to show generality or extensibility, or at least provide working approaches to treating newer blockchain implementations,” it added.

The pre-solicitation period, which will run until December 18, 2018, will give an opportunity to interested parties to comment on or request information about the topic areas attached in the notice. The final solicitation is expected to be released around December 19, 2018.