Monero Price Rises While IRS Tries to Break Anonymity

The Internal Revenue Service (IRS), which is the U.S. tax authority, has been drawn towards the most renowned private cryptocurrency, Monero.

Reportedly one of the best choices for privacy-focused cryptocurrency, Monero has attracted the attention of the tax agency. As a result, the IRS has employed analysts to unmask Monero’s activities. However, it does appear that Monero price is being positively affected by this situation.

IRS looks into Monero

The much talked about anonymity surrounding Monero has aroused the interest of tax agencies. Tax authorities around the world are worrying over the privacy-focused cryptocurrency because the inability to track the money flow could result in any possible appropriate taxes not being paid, not to mention any illegal activities that are being pursued using XMR.

In a bid to uncover the anonymity surrounding Monero, the IRS gave an offer to analysis firms. In mid-September, they offered analysis firms a sum of $650,000 to unmask the activities of Monero. At the end of September, the IRS appointed two companies for this task from the 24 companies that had applied.

The two analysis firms to perform the task on Monero are Chainalysis and Integra FEC. Chainalysis is well known for carrying out blockchain and cryptocurrency analysis for businesses and law enforcement agencies while Integra FEC is a forensic data analytics firm that works in traditional finance and has expanded into the crypto realm. Chainalysis is, however, abreast of issues on the IRS tender and Monero.

What does the future hold for Monero?

In the ranking of cryptocurrencies, Monero is in 15th place despite possessing a market capitalization worth approximately two billion dollars. This shows that Monero is trailing behind Cardano, EOS, Polkadot, and Bitcoin SV.

When cryptocurrency users are faced with the decision to choose between privacy-focused currencies like Monero or a liquid, available, and convenient currency like Bitcoin, they end up choosing Bitcoin, says Maddie Kennedy of Chainalysis. She adds that  Bitcoin has an additional advantage as ”exchanges increasingly delist privacy coins in light of regulations.”

The quest to break the anonymity of Monero could have a major impact, but to which end? Some, such as CipherTrace CEO Dave Jevans, say that Monero price will fall initially but eventually recover. Others, like Coinfirm CEO Pawel Kuskowski, believe that Monero price will fall “close to zero” if the crypto’s anonymity is busted.

It should be noted that while Monero has been used by criminal elements, it has also been used by normal people who just wish their transactions to remain anonymous.

In the short term, Monero price has gone up. At the time of writing, XMR stood at $123.75, with a 24-hour trading volume of $247,892,574. XMR price had risen up 5.5% in the last 24 hours. It also has a circulating supply of 17.7 million coins.

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