- CipherTrace has claimed to have developer a Monero tracing tool
- The previously untrackable blockchain can now be monitored for illicit activity
- The Monero community has cast doubt on the claims
CipherTrace, the blockchain analysis company, has claimed to have developed a tool to trace Monero transactions. According to John Jefferies, the chief financial analyst at CipherTrace, the crypto forensics company has engineered a way of tracing Monero transactions involved in illicit activities, although it is not yet suitable for Anti-Money Laundering purposes. The development will be of concern to those who feel that Monero is one of the few remaining truly unidentifiable tokens remaining, although the Monero community has reacted with skepticism over the news.
CipherTrace Lifts the Lid on Monero’s Privacy
Monero began as a fork of Bytecoin in 2016 and quickly became a favorite with darknet users due to its privacy features. It has long been considered one of the most private coins with which to transact, which makes the claims of CipherTrace all the more interesting.
Dave Jevans, CEO of CipherTrace, told Cointelegraph that the tool is he first of its kind and could be used to track Monero transactions in much the same way as they can the other 800 coins they can currently trace:
The tools include transaction search, exploration and visualization tools for Monero transaction flows that have been integrated with CipherTrace’s inspector financial investigations product.
CipherTrace recently signed a contract with the U.S. Department of Homeland Security’s Science and Technology Directorate, with the Monero tracking tool seemingly being the first of the blockchain analysis tools developed as part of the partnership. Perhaps unsurprisingly, the tool will be used by the U.S. Department of Homeland Security (DHS).
Monero Community Doubts Efficacy
The Monero community responded with skepticism to CipherTrace’s claims, with Justin Ehrenhofer, regulatory compliance analyst and Monero community workgroup organizer, doubting the efficacy of the tool:
We assume that CipherTrace has developed a novel method to trace Monero transactions, but I am not quite sure of what they can do, so it’s hard to interpret the legitimacy of their claims. Saying you have a method to look at Monero transactions doesn’t mean this is now as transparent as Bitcoin transactions.
Only time will tell if crypto forensics experts CipherTrace can back up their claims with real world use, but if their tool can do what they claim then the writing could be on the wall for illicit Monero users.
