CiperTrace, the blockchain intelligence firm that previously gave the feds so-called “Monero-tracing tools," filed their second Monero-tracing patent application. The company says their tools help law enforcement identify Monero transactions associated with criminal activity.
According to a press release on the company’s website, the 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 transactions and clustering likely owners.
- Monero decoy reduction.
- Probabilistic approaches to risk-based Monero money-laundering controls.
- Transaction visualization tools and ways to track stolen Monero currencies or illicit Monero.
- Methodologies for gaining intelligence about transactions that rely on third-party nodes.
- Active participation in the Monero network to gain intelligence.
CipherTrace said the tools have been in development since 2019. The project has “laid the groundwork for future implementation of entity transaction clustering, wallet identification, exchange attribution, and other functionality that will provide law enforcement with even more tools for investigating Monero transactions and addresses related to criminal activity.”
The company claimed that law enforcement’s interest in tracing Monero has soared due to the widespread adoption of Monero by darknet marketplaces. At least 45% of markets support Monero, including Dark Market, White House Market, Monopoly, Versus, and Cannazon, among many others.
CipherTrace said that cryptocurrency exchanges are delisting Monero (and other privacy coins) because they are an “inherently high risk to any anti-money laundering program.” This month, ShapeShift delisted Monero, Zcash, and Dash. Other exchanges, such as OKEx and Upbit, have already delisted Monero.
CipherTrace’s Monero tracing capabilities will allow VASPs to identify when inbound XMR may have criminal origins, allowing them to adequately risk rate customer transactions per any required regulations.
But, don’t worry. “CipherTrace has always been an advocate of user privacy,” according to the press release.