DHS to Track Privacy Coins
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Main page Analytics, US, Blockchain, Monero, Zcash, Cryptocurrency
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Dec. 4, 2018

The U.S. Department of Homeland Security (DHS) wants to create applications that can analyze privacy coins such as zcash and monero.

A document published by the DHS Small Business Innovation Research Program (SBIR) talks about finding ways to conduct a retrospective analysis of confidential cryptocurrencies that could potentially be used for criminal activities. The compilers of the document emphasized that such platforms as zcash and monero are focused on user privacy and consider anonymity as their key feature, which makes it difficult to determine the origin of the source of the transaction or the amount of transferred funds.

«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. To that end, this proposal calls for solutions that enable law enforcement investigations to perform forensic analysis on blockchain transactions,» states the document.

Although the authors of the document refer to zcash and monero as two examples of confidential cryptocurrencies, they also note that there is a possibility of the emergence of new platforms with similar privacy features. This must be considered when creating solutions for analyzing transactions in the blockchain. New solutions should provide a more general approach to analysis, and not to individual cryptocurrencies.

DHS Explores Potential Uses of Blockchain

However, at the moment, specific solutions for analyzing transactions have not yet been selected. The drafters of the paper suggested that interested participants contact them in order to comment on the possibility of creating such a system or to discuss some technical issues. The final draft of the document is scheduled to be published on December 19.

Back in early 2017, it became known that DHS plans to use the blockchain to protect, transfer and store data collected by CCTV cameras and control sensors in internal databases. Thus, the agency planned to prevent possible data manipulations, potential attacks and malicious hacks of thousands of devices operating at airports, ports and land borders of the United States with Mexico and Canada. Currently, these devices rely on an outdated system based on centralized servers and databases that are highly vulnerable to cyber attacks.

DHS has come to the conclusion that for the efficient storage of large amounts of data, an efficient, transparent and unchanging infrastructure is required, which Factom blockchain is going to provide. The Ministry entered into a contract with the project. In July 2016, a startup received a grant from DHS in the amount of $199.000 for the implementation of the joint blockchain project.

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