us department of homeland security blockchain

The US Department of Homeland Security (DHS) has published its 27-page pre-solicitation document for the fiscal year 2019. In the document, the US law enforcement department said that they want dedicated resources to create blockchain-based forensic applications.

What does the US Department of Homeland Security Want?

The US Dept. of Homeland Security has recently submitted a proposal on multifarious aspects including blockchain technology, cybersecurity, the Internet of Things (IoT), communications, and sensors. The proposal was submitted for the department’s Small Business Innovation Research program that includes their Science and Technology platform.

In the concerned proposal document, the US DHS said that they want to leverage Distributed Ledger Technology (DLT) for leveraging commercial as well as government applications in the future. Reports say these apps will help the US law enforcement department in analyzing movements of the digital assets that are privacy-centric in nature. They have observed in their proposal that blockchain technology is used by some for anonymity and transaction obfuscation. That’s why DHS wants blockchain based surveillance tools for monitoring privacy cryptocurrencies such as ZCash and Monero.

The DHS document says:

“This proposal seeks applications of blockchain forensic analytics for newer cryptocurrencies, such as Zcash and Monero… 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.”

How to Tackle Cryptocurrency Anonymity?

In the document, the US Department of Homeland Security has said that some people use privacy features of some newer cryptocurrencies such as Monero and Zcash for illegal fund transfer. That’s the reason why there’s an increasing need for forensic analysis on anonymous blockchain transactions.

The law enforcement department wants to tackle cryptocurrency anonymity in 3 phases

  1. The researchers and programmers of the department must modify the existing DLT analysis tool for analyzing the anonymous blockchain transactions. This new tool will be specially designed for carrying out surveillance on privacy currencies including Monero and Zcash.
  2. A blockchain monitoring prototype will be created in the second phase for analyzing “suspicious transactions without external data, with external data, and on another blockchain platform.”
  3. The 3rd phase will involve rolling out of blockchain surveillance applications that can be used for commercial as well as government purposes.

The DHS solicitation letter also says that the blockchain forensic analytics application will help to carry out crypto security operations from state to local enforcement levels.


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