The Monero community has recently challenged CipherTrace, who believes they have identified the first way to track Monero ( XMR ) transactions . Monero was designed to make transactions on the network untraceable by a third party, unlike transactions via Bitcoin, which are pseudo-anonymous. However, CipherTrace recently released a statement claiming they had found a way to trace XMR transactions.
Monero Community Challenges Claims
The claims immediately sparked a major discussion within the Monero community. Many experts released videos, tweets, and blog posts challenging these claims. The reason for this widespread disbelief within the Monero world is that the coin is an open-source project focused on being anonymous.
Monero is a privacy coin that was designed to be untraceable and fungible. Since inception, it was believed that someone cannot determine the sender, receiver, or the transactions behind Monero. The value proposition was keeping Monero users protected, even when the owners address is identified using data outside the blockchain network.
CipherTrace CEO Joins a Discussion on the Issue
The CipherTrace CEO recently joined members of the Monero community in a discussion that was posted on YouTube, to talk about the claims of tracing Monero transactions. The CEO claimed that they were working on Monero tracing capabilities as part of the US government contract. They received the contract from the Department of Homeland Security to help them in official investigations.
The CEO said that their tool does various things such as risk assignment and case management of wallet addresses. He said that he would not share everything they were doing to trace these transactions. During the discussion, Sarang Noether expressed concerns about the claims made by CipherTrace. Thus far, these concerns have not been fully resolved.
The Government Contract
CipherTrace received contracts worth over $6 million according to data by a funding tracking site. The contract included a $3.6 million potential value contract whose deadline was August 29, 2020, with 65% funding for $2.4 million according to the funding tracking site.
Monero Privacy Enhanced
According to a September 4, 2020, press released by Monero Outreach, they have already published a new algorithm definition called Triptych. They said that the Triptych upgrade would make Monero transactions even more secure by obfuscating the limited data used by CipherTrace. The Triptych algorithm represents a continual improvement to Monero. It would appear that the CipherTace capabilities have been defeated even before they could be deployed publicly.
On-Going Struggle between Privacy and Surveillance
The events around Monero’s traceability this week show the continued struggle between government surveillance and the privacy of crypto transactions. It is an ongoing battle and the crypto community will keep working to ensure that Monero transactions are as secure as possible.
In the recent past, government bodies have become aggressive when it comes to crypto crimes. They have been working hard to track down crypto transactions using crypto. As part of their work to trace transactions, they have essentially criminalized crypto anonymity. They demonstrated this by arresting the CEO of a coin mixer in February 2020. The arrest essentially criminalized coin-mixing services.
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