Cryptocurrency and blockchain have gained recognition in the global market thanks to its transparency and effective financial structure. But the lack of regulation is one of the major concerns that have had a negative impact on the complete ecosystem in a variety of ways.
Countries that are seen to be the hubs of cryptocurrencies are now skeptical about the exponential growth of the cryptocurrency market. Another major concern that arose due to the decentralized platforms was the perpetration of effective terrorist funding and the inclusion of the black market.
The U.S. has been among the first countries that provided cryptocurrency a safe haven to bloom. The U.S. authorities have put the IRS in charge of the system, and the agency believes crypto assets should be taxed in a manner similar to stocks or real property.
However, the IRS has not yet been successful in gaining access to crypto wallets. They are secured through a private key that acts as the ‘password’, and an individual who holds it also controls the crypto assets that are associated with the wallet. Such wallets as Crypterium have the highest level of security.
To this date, the department has been trying to set up different collaborations with software companies to discover the appropriate tools and procedures for getting access to the crypto wallet. Once access is successfully secured, blocking a crypto wallet is possible.
The contracts signed by the IRS are initiated to provide exploitation techniques for accessing crypto wallets without the provision of private keys. The agency will be working with VTO Inc., a Colorado-based firm specializing in device forensics, to research and develop techniques for gaining access to crypto wallets by exploiting hardware, software and firmware vulnerabilities that may exist in the secure devices.
The agency is hoping to research cryptographic wallets, including leveraging digital forensics for firmware analysis, hardware reverse engineering techniques and more. It expects to build a consistent and repeatable process for gaining access to existing and future wallets that can be followed in a digital forensics laboratory.
VTO will first be tasked with exploiting a single device type, or specific model, and showing how it can compromise the integrity of the cryptowallet protections. Once this practice can be applied consistently, VTO will work on exploiting a variety of wallets to identify exploitation techniques and any variables that are consistent across different devices.
However, to date the IRS has not been able to clear out any deals and contracts with crypto wallets to gain information and data. Thus, users need not worry over IRS blocking their crypto wallets for now.