The security of Monero (XMR) users could soon be at risk after cryptocurrency intelligence firm CipherTrace announced the creation of tools that enable law enforcement to track transactions on the privacy-oriented blockchain.
CipherTrace Claims Ability to Track XMR Transactions
According to a press release from Aug 31, CipherTrace collaborated with the US Department of Home Security’s Science and Technology Directorate to develop Monero-tracing technology.
The tools will be put to use in assisting the Department of Home Security’s investigations into activities related to the illicit use of XMR. CEO of CipherTrace, Dave Jevans said:
“Our research and development team worked for a year on developing techniques for providing financial investigators with analysis tools. There is much work still to be done, but CipherTrace is proud to announce the world’s first Monero tracing capability.”
The technology is said to comprise of “search, exploration, and visualization tools” for Monero transactions that are used in conjunction with CipherTraces’s “financial investigations product.” The ability to identify wallets, and track XMR transactions through exchanges are also mentioned.
CipherTrace claims the ability to track Monero transactions will benefit investment funds, cryptocurrency exchanges, and OTC trading desks, which will now be able to list XMR without fear of accepting coins from illicit sources.
Monero Use Case in Jeopardy?
However, if CipherTrace’s claims are truly legitimate, such platforms would probably have little desire to list Monero in the future.
Given that unbreakable privacy is at the core of Monero’s identity, what use would a trackable version of the cryptocurrency have over any other publicly trackable cryptocurrency?
Coinbase CEO Brian Armstrong told Peter McCormack’s podcast audience in July that although he’d personally like to see Monero listed on the Coinbase platform, concerns over its privacy-centric nature in the face of US regulators have stopped him. Armstrong said:
“A lot of it is behind-the-scenes conversations where [regulators] are kind of saying: ‘We very much don’t think you should do this…’”
CipherTrace cites research which illustrates that 45% of illegal marketplaces on the darknet accept Monero as a usable cryptocurrency.
The same research concluded, however, that Bitcoin remained the currency of choice for darknet markets. Given that Bitcoin can be anonymized via third-party coin-mixing tools, the apparent focus on Monero as a regulatory threat-vector could be argued to be irrational.
The post Crypto Intelligence Firm Claims Monero (XMR) Tracking Capabilities appeared first on CryptoPotato.