CipherTrace has become the first company in the world with the ability to trace Monero (XMR) transactions.
“Monero (XMR) is one of the most privacy-oriented cryptocurrencies,” said Dave Jevans, CEO of CipherTrace. “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. We are grateful for the support of the Department of Homeland Security’s Science & Technology Directorate on this project.”
The U.S. Department of Homeland Security contracted with CipherTrace for a total of $3.6 million—with $2.4 million already paid—to create the Monero tracing tool.
CipherTrace’s tool will allow its users to track stolen Monero or identify Monero used in illicit transactions and notifies digital currency exchanges when an individual is trying to send the privacy-centric coin from illicit sources to their exchanges.
Monero’s saving grace?
Monero is a privacy coin; this means that Monero is—or rather, was—fully-anonymous, untraceable, and unidentifiable. Because Monero was so anonymous, it has been delisted or banned from several digital currency exchanges and countries since it is often used as a vehicle for illicit activity—which is probably why Monero is the second most popular coin across darknet markets.
Although the Monero community is viewing the CipherTrace tool as a negative, the tracking tool might actually save—or at least postpone—Monero from its inevitable demise. Now that analytics software exists for Monero, exchanges and governments can once again potential permit Monero since there is now a way to identify the source of illicit activity taking place on the XMR network.
In terms of what the company has planned next for their tracking tool, they said: “the tools CipherTrace developed within the scope of this DHS project have also laid the groundwork for future implementation of entity transactions clustering, wallet identification, exchange attribution, and other functionality that will provide law enforcement with even more tools for investigating Monero transactions and addresses.”
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
