UK tax agency seeks to trace crypto transactions to combat tax evasion

By Yana Berman

HRMC is looking for a contractor to help trace crypto transactions amidst fears that online tools are not doing the job properly.

                                

Her Majesty’s Revenue & Customs (HMRC), which serves as the UK tax agency, is looking for a contractor to build a tool to help trace crypto transactions and match them with service providers.

The contract published by HRMC is worth £100,000 ($130,000, €117,000). For this, the agency requires a tool that would support intelligence gathering methods to identify crypto transactions and trace them to certain crypto service providers.

Aсcording to Cointelegraph HRMC believes that the online tools and human analysis fail to trace the transactions properly. A commercial product, it hopes will be able to do it correctly and to help the agency detect any illicit activity related to crypto.

HMRC reportedly wants to focus on tracing both major coins and privacy tokens, such as Monero, Zcash, and Dash, which are specifically difficult for regulators to track.

The move comes after the country's National Crime Agency published a report that claims that HRMC is vulnerable to cybercrimes, such as hacking, malware, and so-called smishing, a type of phishing that uses social engineering techniques to persuade victims to part with their money.

The agency has created a special Cybercrime team to protect it from fraud. Thanks to its efforts HRMC has already managed to improve from the 16th “most phished brand globally” to the 146th.

Despite the fact that crypto is gradually becoming more mainstream and is gaining adoption across the world, a report by Chainalysis recently found out that major crypto exchanges received around $2.8 bn in Bitcoin from criminal businesses.

FURTHER READING: British financial services sector pays record tax bill

FURTHER READING: Boris Johnson postpones corporation tax cuts

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