Blockchain forensics firm CipherTrace has claimed in a press release it has developed the “world’s first” Monero (XMR) tracing fools for the U.S. Department of Homeland Security (DHS).
Monero is a privacy-centric, open-source cryptocurrency launched in 2014 that rose to prominence thanks to its privacy enhancements over other cryptocurrencies like bitcoin. It uses ring signatures, bulletproofs, and one-time addresses to improve the privacy of those who use it.
Its privacy-centric nature has seen various darknet markets adopt it as a payment method. Per CipherTrace’s press release, 45% of darknet markets now use XMR, making it the “second-favorite cryptocurrency of choice among criminals just behind bitcoin.”
CipherTrace’s tools, per the firm, allow it to “trace and visualize Monero transaction flows.” The tool helps explore XMR transactions to assist in law enforcement investigations. The press release reads:
- These tools include transaction search, exploration, and visualization tools for Monero transaction flows that have been integrated with CipherTrace’s Inspector financial investigations product. This provides ways to track stolen Monero currencies or Monero currencies used in illegal transactions.
Dave Jevans, CipherTrace’s CEO, said that while some believe it’s impossible to identify the true source of a Monero transaction, the firm has been working on studying the network for a year, and has now created tools to help law enforcement uncover illegal XMR transactions.
Jevans, on social media, thanked the U.S. Department of Homeland Security’s Science & Technology Directorate for funding and assistance on the project. On Reddit, a preview of how CipherTrace’s analysis works has been shared, showing it’s “not simple merge analysis.”
On social media, several users revealed they believe it’s “extremely unlikely that CipherTrace can trace Monero to the remote extent that they can trace any other coin.” Seth Simmons, an information security engineer and Monero proponent, also weighed in:
Responding to the criticism, Jevans pointed out that “tracing Monero will never be as deterministic as tracing Bitcoin.”
Featured image via Pixabay.