While cryptocurrency holders are moving their coins to secure hardware wallets, the Internal Revenue Service (IRS) is not asleep at the wheel.
According to a report by VICE, the law enforcement arm of the ferocious tax-collecting government agency is hiring contractors who are able to crack crypto wallets that may be related to investigations.
The document posted by the Criminal Investigation Division (CID) reads that its inability to crack "the cryptographic puzzle" makes it challenging to track the movement of funds and recover them:
The decentralization and anonymity provided by cryptocurrencies has fostered an environment for the storage and exchange of something of value, outside of the traditional purview of law enforcement and regulatory organizations. There is a portion of this cryptographic puzzle that continues to elude organizations—millions, perhaps even billions of dollars, exist within cryptowallets.
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Yuri MolchanThe IRS is looking for someone who will be able to build a forensics tool for breaking into crypto wallets:
The explicit outcome of this contract is to tame the cybersecurity research into measured, repeatable, consistent digital forensics processes that can be trained and followed in a digital forensics' laboratory.
However, the consensus among security researchers appears to be that hardware wallets have very few vulnerabilities to successfully hack them, which means that the IRS's effort will likely ultimately end up being futile.
Dan Burgin