The IRS wants to create a set of reliable tools and processes for cracking crypto wallets as the purchase of goods and services using the technology becomes more popular. The IRS’s Criminal Investigations division faces difficulties in that cryptocurrencies are harder to trace and therefore do not offer the same transparency as typical wire transfers. Cryptocurrencies are digital assets that boast set or fluctuating market rates that can be traded for real currency. Some cryptocurrency traders use crypto wallets to ensure that their assets are secure. These wallets keep the private keys needed to access the cryptocurrency separate from the broker completing the transaction.
The wallets can take the form of a segmented app that contains an extra layer of security that stores the keys offline until needed. The IRS Criminal Division’s Digital Forensics Unit states that crypto wallets seized during investigations have been difficult to crack. Therefore, the unit is seeking to purchase tools capable of cracking wallets that are reliable, secure, and effective. The IRS also aims to mature the process of cracking crypto wallets when necessary for criminal investigations.
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