Digitalcurrency intelligence firm CipherTrace reported today that it’s built up a toolset for tracing Monero (XMR) transactions and that it’s done so at the instruction of the us Department of Homeland Security (DHS).
Monero has picked up notoriety for its security driven structure, making it the second most hottest coin for darknet transactions after Bitcoin. Nonetheless, CipherTrace claims that its instruments will permit agents to look and investigate Monero transactions.
As indicated by CipherTrace, the firm gone through a year performing on the toolset, which was performed by means of an agreement with the DHS Science and Technology Directorate.
According to GovTribe, some $2.4 million was paid to CipherTrace through the span of the agreement, which was signed in 2018 and carried a maximum value of $3.6 million.
While the toolset was created for the usage of the DHS to track down illegal or wrongfully utilized assets, CipherTrace recommends that crypto exchanges and investment funds will also benefit from knows that they aren’t accepting illegal assets—and that they continue to be in compliance with regulations.
Moreover, CipherTrace anticipates adding further usefulness to the present version of the toolset, with functions like “entity transactions clustering, wallet identification, and exchange attribution” planned for the longer term .
Also, albeit the present announcement would appear to be a blow against Monero and other privacy centric coins, CipherTrace paints it as positive in the long term for XMR, especially given that it has been delisted from some exchanges.
“Analytics is crucial to the survival of privacy coins because, if they cannot evaluate risks, some governments could make transacting with privacy coins extremely difficult or ban them outright, like Japan,” said CipherTrace CEO Dave Jevans, in a statement provided by the company.
“Several Korean Exchanges delisted privacy coins and, just last week, several Australian exchanges banned Monero and Zcash. As privacy advocates ourselves, our hope is that by developing capabilities for tracing Monero, we can help to ensure Monero’s viability.”
CipherTrace CFO John Jeffries revealed that its XMR tracking tools can be used in ransomware cases, for example , although they’re not yet robust enough to be used for anti-money laundering purposes.
The company’s toolset track transaction flows but don’t reveal the identities of users, law enforcement must use other tools and acquire court orders to finish that part of the puzzle.