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CipherTrace Provided Feds with "Monero Tracing" Tools

CipherTrace, a self-described “Blockchain Forensics Team,” reportedly created “Monero tracing” tools for the U.S. Department of Homeland Security.

Below is the relevant portion of the press release (also available here).

CipherTrace’s contract with DHS Science & Technology Directorate resulted in the development of forensic tools for law enforcement and government agencies to trace and visualize Monero transaction flows for criminal investigations. CipherTrace developed tools to explore Monero transactions to assist in investigations. These tools include transaction search, exploration, and visualization tools for Monero transaction flows that have been integrated with CipherTrace’s Inspector financial investigations product. This provides ways to track stolen Monero currencies or Monero currencies used in illegal transactions. It also helps assure cryptocurrency exchanges, OTC trading desks, investment funds and custody providers that they do not accept Monero from illicit sources and investigate Monero received from potentially illicit sources and take appropriate actions to stay in compliance.

With 45% of darknet markets now using Monero—the second-favorite cryptocurrency of choice among criminals just behind bitcoin—law enforcement interest in Monero tracing has soared. Monero employs a particularly unique design to ensure user anonymity including always-on, enforced privacy. Ring signatures, which enable transaction mixing, are built into the protocol design, so when attempting to locate the source of a transaction, it will appear as if a whole crowd of users took part in the exchange, making it nearly impossible to identify the true source.

“Monero (XMR) is one of the most privacy-oriented cryptocurrencies,” said Dave Jevans, CEO of CipherTrace. “Our research and development team worked for a year on developing techniques for providing financial investigators with analysis tools. There is much work still to be done, but CipherTrace is proud to announce the world’s first Monero tracing capability. We are grateful for the support of the Department of Homeland Security’s Science & Technology Directorate on this project.”

The tools CipherTrace developed within the scope of this DHS project have also laid the groundwork for future implementation of entity transactions clustering, wallet identification, exchange attribution, and other functionality that will provide law enforcement with even more tools for investigating Monero transactions and addresses.

It's Called We Engage In A Mild Amount of Tomfoolery
1f686800 Tue, Sep 1, 2020

Watched the live stream the CEO of CT gave with one of the monero devs on the hidden service that streams YouTube videos. He really didn’t know what he was talking about kept dodging the devs question claimed they were aiming for 90% probability but will never know 100% who owns the wallet.

Never give out your main wallet address, churn between multiple wallets. At least for the CEO said this is only phase one.

d5eddaf0 Wed, Sep 2, 2020

Although I agree people shouldn’t panic, it’s always a good idea to always be careful!

368a8f30 Wed, Sep 2, 2020

Good point. I’m going to watch the stream again and see if I missed anything.

dafee460 Tue, Sep 1, 2020

By the CEO’s description their product sounds like little more than a case management tool. It cannot perform wallet or transaction tracing nor identify signers. Sarang Noether asked whether this tool was about “compliance theater” and that seems to sum up it’s functionality well.

hxxps:// for the interview.

91e586c0 Wed, Sep 2, 2020

Basically a gui for already known details.

5ab7e570 Wed, Sep 2, 2020

I’d say it’s more than gui, but also not something mindblowing.
The article doesn’t say too much. Fuck the feds though, they want to track our every step. Fuckers.

81bee4c0 Wed, Sep 2, 2020


e41e0a50 Wed, Sep 2, 2020

Maybe if CipherTrace provided a shred of evidence of the tracing tool they apparently have or some proper proof, it would have stood a chance. I call this bullshit for now.

625d0e30 Wed, Sep 2, 2020

The horrifying thing is i have exchanged xmr to btc from binance and then sold on localbitcoins,
Just to save few dollars from mixing. Either way thanks for making me more paranoid :)

2e183cb0 Wed, Sep 2, 2020

There is updated talk on the monero sub on reddit saying they think it could be more likely then they previously thought due to poisoned outputs and dust attacks. Check the update.

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