The cryptocurrency Monero is considered the first choice for a private cryptocurrency. This has now also reached the US tax authority, the IRS, which has hired an analyst to break Monero. That makes the market bullish – although one could also be concerned.
This week you could think that Bitcoinblog.de is about shedding light on the jungle of the US authorities. Today the focus is on the IRS. This is the abbreviation for “Internal Revenue Service” and means the federal agency for tax affairs. A federal tax office, so to speak.
The IRS is apparently currently dealing with the cryptocurrency Monero. Their much-touted anonymity is increasingly causing tax investigators to suffer from stomachaches. Because money whose flows cannot be tracked is money that potentially eludes the tax authorities. Therefore, in mid-September, the agency offered $ 650,000 for analysis firms that can break Monero’s anonymity.
As stated earlier, blockchain and data analysts like CipherTrace are in a position to have some statements about the origin of Monero credits. In doing so, however, they rely on both off-chain and on-chain data and – at best – can specify probabilities. Even in the worst-case scenario, privacy remains excellent.
Among the 24 applicants, the IRS had apparently decided on two companies at the end of September – Chainalysis, a company known for its analyzes, and the lesser-known analysts from Integra FEC, whose home is more in traditional finance. The actually very informative company Chainalysis is a bit covered about Monero and the IRS tender.
The journalists at Cointelegraph only manage to elicit a short quote from the PR manager: Users of cryptocurrencies, especially criminals, often have to decide today whether to use a private cryptocurrency like Monero or a convenient, available and liquid currency like Bitcoin. Bitcoin often wins, “mainly because exchanges are increasingly taking privacy coins from trading in order to comply with the regulation.”
Above all, this statement sounds like an understatement, as if the matter isn’t that important, but at the same time paints a dark picture of the future of Monero.
The market is currently optimistic about the news: Monero managed to establish itself as the privacy coin of choice, and the fact that the IRS is specifically looking for methods to break Monero’s anonymity – that doesn’t just prove that Monero has earned the crown of privacy coins? The rate of the currency has accordingly risen significantly over the past few days and weeks, from $ 80 30 days ago to $ 110, or from 0.0078 Bitcoin to 0.0102 Bitcoin.
With a market capitalization of almost two billion dollars, Monero is still in 15th place in the ranking of cryptocurrencies. Behind EOS, behind Cardano, behind Bitcoin SV, behind Polkadot. At least in terms of actual use and importance for the Darknet, Monero is still considerably undervalued.
On the other hand, the valuation could also reflect the risk that Monero brings with it. As highlighted by Chainalysis, a privacy coin like Monero, which is increasingly used in the darknet, is getting too hot for many exchanges. While with transparent cryptocurrencies they can monitor the flow of money in order to follow the regulation, this is more or less impossible with Monero.
For many exchanges, this can mean trouble. Therefore, some take the coin off from trading – for example, CoinCheck in Japan or BitOasis in Dubai – while others do not list it at all. It’s easy to burn your fingers on the cryptocurrency that worries the top tax collector in the US.