Pre-Solicitation Document Hints Homeland Security Is Attempting To Track Privacy Coin Payments

Pre-Solicitation Document Suggests That Homeland Security Wants To Track Privacy Coin Transactions

The United States and cryptocurrency have had a complicated relationship lately, and the U.S. Securities and Exchange Commission has created definition of each of the different types of digital asset coins. While the only token with a significant amount of details on regulation has been security tokens, a new pre-solicitation document may make it possible for another U.S. authority to track privacy coins as well.

Right now, the U.S. Department of Homeland Security (DHS) has a research program that published a recent pre-solicitation that discusses how bitcoin is used for a transaction. Even though the document talks about the different uses for cryptocurrency in the commercial industry and the government, much of the examination has to do with privacy-focused coins. Considering the role of DHS, the entity wants to forensically analyze these coins to see the risk of criminal activity.

Some of the tokens discussed in the article included ZCash and Monero, which maintain a certain level of privacy and anonymity for their customers. However, without some kind of identifying information, there’s no way to see the origination of the transaction or even how much, leaving the opportunity open for cybercriminals.

The document says,

“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.”

It continues, saying,

“This proposal calls for 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.”

Even with ZCash and Monero named in the document, the entity also comments that there are plenty of platforms that are presently being developed with the same privacy priorities. Due to these developments, the solutions that are ultimately implemented will need to be broader regulations or “provide working approaches to treating newer blockchain implementations.”

The document is clear about three phases that the authorities would take with a proposal for the privacy coins. However, the document specifically says that the agency isn’t actually looking for a solution actively at this time. Instead, there will be an actual solicitation planned for release around December 19th, though interested individuals have the option of contacting the authors until the release.

Consumers that want to learn more about the document can read it in its entirety through Scribd at

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