Blockchain Analytics Firm Looks to Trace Monero (XMR) Transactions

Monero (XMR) has been one of the main privacy technologies in the crypto space for many years now. Unlike what many think, Bitcoin is actually easy to track if a user connects their account to an exchange.

But even Monero may be susceptible to tracing, according to a recent press release from CipherTrace.

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Monero Is Being Cracked by CipherTrace

According to a press release from CipherTrace, a leading blockchain analytics company, they’re currently working on tracking Monero in collaboration with the Department of Homeland Security:

CipherTrace has filed their second Monero tracing patent application— Techniques and Probabilistic Methods for Tracing Monero. These patents cover: Forensic tools to explore Monero transaction flows to assist in financial investigations. Development of original tracing methodologies based on simulation techniques and Bayesian approaches. Statistical and probabilistic methods for scoring transaction and clustering likely owners.”

It appears that Ciphertrace’s move to crack Monero may be related to a bounty/grant being offered by the Internal Revenue Service of the U.S.

The IRS revealed in a contract published to a government website that it will give a grant of up to $625,000 to developers or development firms that can manage to crack private cryptocurrency technologies:

“IRS-CI is seeking a solution with one or more Contractors to provide innovative solutions for tracing and attribution of privacy coins and Layer 2 off-chain transactions, such as expert tools, data, source code, algorithms, and software development services to assist their Cyber Crimes agents in carrying out their mission as it relates to cryptocurrency privacy technologies.”

The IRS specifically mentioned Monero, the Bitcoin Lightning Network, amongst other technologies within the space that allow users to obtain enhanced privacy.

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Money Moves: $1 Billion Valuation Reached by Chainalysis

As the industry gains increasing traction in terms of its monetary value, the value of tracking illegal transactions and entities related to the space has increased.

Chainalysis, a competitor of CipherTrace, recently raised $100 million at a $1 billion valuation as per Forbes.

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Blockchain Analytics Firm Looks to Trace Monero (XMR) Transactions