According to a notice published by the Internal Revenue Service last week, the US tax agency wants to improve its ability to track cross-chain transactions.
The term “cross-chain” refers to the ability of two or more blockchain networks to interact or communicate with one another, most commonly in the context of users being able to transact from one network to the next via “bridges.” According to the IRS notice, which was published on September 16, the agency wants more information about these processes as part of its criminal investigation efforts.
According to the notice:
“There are a number of cryptocurrency tracing platforms on the market today, but due to the way blockchain technology works, a significant portion of the intelligence and coverage provided by each provider is unique. Additionally, the TRM Forensics Web-Based tool has capabilities that are not currently available in other providers’ tools. Because of its cross-chain analysis tracing capabilities and unique methods for visualizing various cryptocurrencies across blockchains, CCU has requested this platform.”
The notice is about a contract it wants to award to TRM Labs Inc., a company based in the United States. Bessemer Venture Partners led a $14 million Series A funding round for TRM this summer. PayPal Ventures, the payments company’s venture arm, is one of the company’s backers.
The IRS is seeking a broad expansion of its crypto capabilities, according to a report published in June by The Block. The agency is asking Congress for more funding so that it can expand its crypto-related enforcement efforts and hire outside experts.
Coinbase, a cryptocurrency exchange, announced on Monday that it had reached an agreement with the US Department of Homeland Security to use its own analytics software.