Monero (XMR) has long been recognized as one of the most powerful “privacy coins” in the industry; the coin is a favorite of users who want to be as anonymous as possible in their transactions. However, Monero’s days as a true “privacy coin” can be numbered.
In fact, cybersecurity firm Ciphertrace has filed not one, but two patents for the technology it claims is capable of tracking transactions on the Monero network.
“Law enforcement interest in tracking Monero has shot up.”
“With 45% of darknet markets now supporting Monero, the second-favorite cryptocurrency of criminals, right after bitcoin, law enforcement interest in tracking Monero has skyrocketed,” a blog post said. company. Ciphertrace also said that the development of the technology is part of the scope of a US national security project.
According to the same blog post, the patented technology includes “statistical and probabilistic methods for scoring transactions and grouping likely owners”, as well as “methods for acquiring transaction information that rely on third-party nodes” and “development of original tracing methodologies based on simulation techniques and Bayesian approaches ”, among other things.
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CipherTrace also pointed out that with or without transaction tracking tools, privacy coins like Monero are facing more and more scrutiny from cryptocurrency exchanges.
Indeed, as law enforcement continues to pressure these exchanges, exchanges wish to distance themselves from criminal activity as much as possible: “Some exchanges, such as OKEx and Upbit, have already removed private coins based on their interpretation of FATF guidelines “, the blog post said. “This month, Colorado and Switzerland-based ShapeShift removed the Zcash, Dash and Monero privacy coins.”
The nation of South Korea also announced it would officially ban the use of privacy coins, which forced exchanges operating in the country to stop supporting privacy coins.
This “does not mean that it is now as transparent as Bitcoin transactions”.
CipherTrace’s first Monero tracking technology patent was filed in August of this year. At the time, Justin Ehrenhofer, organizer of the Monero Community Working Group and regulatory compliance analyst at DV Chain, told CoinTelegraph that although CipherTrace may have developed a “new method” for tracking Monero transactions, “it doesn’t mean [Monero] is now as transparent as Bitcoin transactions “.
“Without specific information, any speculation is just that – speculation,” Ehrendorfer said.
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