HMRC UK & IRS USA investing in crypto crime capabilities software tools, education and training

Report by Blockchain Investigation Agency - Swiss Security Solutions LLC, Zürich, Switzerland

HM Revenue and Customs of the United Kingdom has significantly ramped up its ability to probe crypto assets held by suspected tax fraudsters after signing a six-figure deal for investigative software.

Recently published procurement information reveals that, on 1 April, the department entered into a one-year deal which was directly awarded to specialist tech firm Chainalysis.

The contract – which is valued at £844,604 – covers the provision of a “cryptocurrency investigation tool”. In recent years, the tax agency has seen a growing need to probe cryptoassets as part of its anti-fraud operations. Last year, HMRC made its first-ever seizures of non-fungible tokens – digital tokens embedded with a unique signature.

The department has previously deployed training and technology from Chainalysis on a year-deal that immediately preceded the new contract. The outgoing engagement was valued at just £50,000, indicating that the department is significantly increasing its crypto capabilities.

On the other side of the ocean, the Internal Revenue Service (IRS) of the United States is planning to send investigators to four countries where they are expected to tackle the use of crypto and decentralized finance products in global financial and tax crimes. According to the tax collector’s spokesperson, the IRS will be able to determine the success of the pilot program by rating the investigators’ “ability to work cooperatively” with global law enforcement bodies.

The United States Internal Revenue Service (IRS) is set to send four agents specializing in cyber and crypto crime to Australia, Colombia, Germany, and Singapore. According to the report, the four agents’ secondment is part of the revenue collection body’s pilot program that will run between June and September 2023.

Carissa Cutrell, an IRS spokesperson, is quoted in the report stating that the four agents’ mission is “to help combat the use of cryptocurrency, decentralized finance and mixing services in international financial and tax crimes.” Cutrell also spoke about the revenue service’s likely plans once the 120-day pilot program comes to an end.

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