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The US Spends Millions Tracking Digital Currency Users

A recent report suggests that residents of the US who take part in digital currency transactions or undergo business within the country are likely monitored by government organizations.  


 

Digital Currency Transactions Tracked By US Government

According to public records, Diar, a research-based firm, concluded that agencies within the US government totaled over $5 million towards blockchain analysis and the procedures required to link user IDs with digital assets.

Although specific digital assets and associated tools permit users to transact anonymously, the majority of crypto holders and traders leave a substantial trail accessible by investigators who are able to connect personal identification to digital wallets. If a crypto user’s address is revealed to investigators, services or even hackers, their entire wallet and all associated transactions can be linked directly to their true identity.

Such privacy breaches occur when crypto traders perform a deposit or withdrawal of cryptocurrencies with an exchange requiring a process of ID verification. Other manners in which a users address could be exposed include carrying out transactions with someone whose identity has already been unmasked, or by associating ones address with an easily identifiable nickname online.

IRS Spends Millions of Government Issued Spending on Blockchain Analysis

It is no surprise that the majority of money spent by US governing agencies comes from the IRS, responsible for investigating and collecting taxes. The agency collectively signed multiple contracts with digital asset forensic analysts totaling to more than $2 million. That sum alone represents 38% of all government issued funds spent towards such services.

According to reports by CCN, the United State’s IRS agency signed with firms focused on tracing blockchain transactions in order to reveal the identities of investors believed to possibly conceal their actual income received from digital asset investments. The IRS has buckled down on such enforcement pertaining to tax violations processing a court order directed at Coinbase in an attempt to retrieve further user information.  

The second biggest spender within government agencies is the ICE, who focuses on policies concerning immigration and foreigners residing within US borders. The agency collectively spent $1.5 million on contracts followed by the FBI who spent a little over $1 million. The SEC, which is in charge of regulating the crypto market within the US, has remarkable spend a total of just under $185,000 directed towards tracing digital currency transactions.

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