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ZachXBT Accuses the IRS Criminal Investigation Unit of Exceeding Appropriate Boundaries

Blockchain investigator ZachXBT alleges overly aggressive tactics by US law enforcement

Renowned blockchain investigator ZachXBT has recently claimed that he has been subjected to what he considers "borderline harassment" by the Criminal Investigation (CI) Unit of the United States Internal Revenue Service (IRS). According to a post on X (formerly Twitter) on March 6, ZachXBT stated that while he has been open to assisting victims and providing necessary information to law enforcement, he believes the IRS has overstepped his "personal boundaries" in their attempts to enlist his help in solving blockchain-related crimes.

ZachXBT shared several images, one of which showed an email from an IRS-CI special agent requesting his assistance and commending him for his "really impressive work." 

The agent wrote: 

"I ran across your profile on social media and I've seen some really impressive work, esp. Your use of blockchain tracing tools," 

The agent continued: 

"I've been an IRS-CI special agent for a while, but I'm pretty new to the crypto/cyber arena and I was hoping you could give me a sense of what I should be looking at if I wanted to make the biggest impact."

However, ZachXBT alleges that the IRS has resorted to various means of contact, including showing up at old addresses, contacting personal emails using private data, and sending mail, despite the availability of public contact methods. He views this as a "blatant disregard for any professionalism."

IRS expands collaborations with blockchain tracing experts

The allegations made by ZachXBT come amidst the IRS's increasing efforts to collaborate with well-known individuals and companies specializing in blockchain tracing. In May 2023, IRS-CI Chief Jim Lee emphasized the importance of the agency's partnership with Chainalysis, a prominent blockchain analytics firm, stating that their collaboration has become invaluable to the unit's investigations.

Lee explained that without the infrastructure and tools provided by Chainalysis, the IRS-CI's efforts to investigate cryptocurrency-related crimes would be nearly "impossible." The unit's reliance on such partnerships has grown significantly as the use of digital assets in criminal activities has increased.

The IRS-CI has been making substantial progress in its crackdown on crypto-related crimes. As of May 2023, the unit estimated that it had seized cryptocurrency worth approximately $10 billion since it began investigating a wide range of crimes involving digital assets.

ZachXBT's recent refusal to assist holders of the Complex (SIMPLE) memecoin, which was minted on the Base blockchain, highlights his stance on prioritizing aid to genuine victims over those who willingly invest in "vaporware meme coins." The project's developers abruptly shut down the project on April 4, leaving investors seeking assistance from the blockchain investigator.