Blockchain

US Department Of Homeland Security Wants To Investigate Blockchain Transactions

The US Department of Homeland Security (DHS) wants to create blockchain forensic applications that can analyze cryptocurrencies, including privacy coins.

The DHS Small Business Innovation Research Program recently published a pre-solicitation document inviting interested parties to comment and design solutions that will enable law enforcement investigations to perform forensic analysis on blockchain transactions.

“This proposal seeks applications of blockchain forensic analytics for newer cryptocurrencies, such as Zcash and Monero,” the document said. “And, ongoing research within the field also contributes to new technological implementations and techniques that continue to multiply the specific types of consensus, privacy, security, and proof mechanisms.”

While the anonymity and privacy protection features of privacy-centric digital asset are desirable, the DHS said that there is similarly a compelling interest in tracing and understanding transactions and actions on the blockchain of an illegal nature. To that end, the DHS is seeking an architecture that shows how system components can be upgraded or interchanged for an extensible and forward-looking solution that can be maintained for use with emerging blockchain networks.

“With the proliferation of new blockchain variants, the desired solution should either attempt to show generality or extensibility, or at least provide working approaches to treating newer blockchain implementations,” the DHS said.

The proposal also noted that the solution may be applied in other operations in government and the private sector.

“Because of the significant impact in areas such as governance, data sharing agreement enforcement, and encrypted analytics interchanges, there are a wide variety of applications in government and the commercial marketplace that can benefit from successful product development,” the DHS said. “Blockchain forensic analytics for the homeland security enterprise can help the DHS law enforcement and security operations across components as well as state and local law enforcement operations. Private financial institutions can likewise benefit from such capabilities in enforcing “know your customer” and anti-money laundering compliance.”

During the pre-solicitation period, which will run until December 18, interested parties will have an opportunity to comment on or request information about the topic areas attached in the notice. The release of the final solicitation is scheduled for December 19.

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