CipherTrace Says Homeland Security Work Gave Rise to Monero-Tracking Patent Filings
Blockchain analytics firm CipherTrace has filed two patent applications for tech it claims will assist authorities in tracking transactions made with the monero (XMR) cryptocurrency.
According to an announcement on Friday, the firm most recently filed a document titled “Techniques and Probabilistic Methods for Tracing Monero” as a follow up to the earlier “Systems and Methods for Investigating Monero” patent application – both arising from the firm’s work with the U.S. Department of Homeland Security that began in 2019.
The filings provide technical concepts for forensic tools allowing exploration of XMR transaction flows in financial investigations.
While monero, the 16th largest cryptocurrency on CoinMarketCap, sets out to offer users more anonymous and private transactions, it is supported by 45% of darknet markets and is favored by criminals for the same properties, the company said.
According to the firm, the patents will lay the “groundwork for future implementation” of entity transaction clustering. Additionally, they provide wallet identification and exchange attribution that would give law enforcement “even more tools” for investigating criminal activity using XMR.
“Built-in obfuscation techniques are what draw in privacy advocates and criminals alike,” according to the announcement.
CipherTrace said its filings also provide concepts for visual tools and ways to trace stolen XMR, methodologies for gaining intelligence about transactions made via third-party nodes and probabilistic approaches to risk-based monero money-laundering controls.
With some regulators eyeing privacy coins like monero, dash and zcash as a money-laundering risk, some exchanges have opted to delist them, including Colorado-based cryptocurrency exchange Shapeshift earlier in the month.