IRS Wants Tools for Cracking Crypto Wallets• Nextgov
As more people across the globe get into trading and purchasing goods using cryptocurrencies—even the federal government—the IRS's Criminal Investigations division wants "reliable" tools and processes for cracking crypto wallets.
Cryptocurrencies are digital assets with set or fluctuating market rates that can be traded for real currency. The rise of cryptocurrencies coincided with the invention of the distributed ledger—also known as blockchain—which allows for transparency in accounting while maintaining a user's anonymity.
For an added layer of security, some cryptocurrency traders use crypto wallets, which keep the private keys needed to access the cryptocurrency separate from the broker making the transaction.
These wallets can take the form of a segmented app with an extra layer of security or a separate piece of hardware—like a thumb drive—that stores the private keys offline until needed.
For the IRS Criminal Division's Digital Forensics Unit, crypto wallets seized as part of investigations have been tough to crack.
"Though a few known cyber penetration testers have published vulnerabilities on specific devices, the process of decrypting the hardware devices to gain access to the wallets has been challenging," according to a request for information posted to SAM.gov.
While the Digital Forensics Unit is interested in purchasing tools capable of cracking crypto wallets, the IRS also wants to help "mature the process" to "obtain reliable results."