CipherTrace stands as a crypto analytics firm, and announced on Friday that two patents were filed by the firm. These patents pertained to technology that was capable of tracing transactions done within the Monero privacy coin network.
A Potential Game Changer
CipherTrace made a blog post on the 20th of November, 2020, and gave some details about these patents. The firm explained that the patents themselves include various forensic tools that can be used to explore transaction flowers within the Monero (XMR) network. This, as one would imagine, will greatly boost probabilistic and statistical methods of transaction scoring, various financial investigations, and visualization tools.
Alongside this, these patents will provide clustering wallets to potential wallet owners, as well as, most importantly, the tracking of illegally used or stolen XMR.
In the statement, Ciphertrace makes it clear that these new tracing capabilities for Monero will allow any virtual asset service provider (VASP) to identify the origins of XMR transactions. From there, these VASPs will be capable of giving customer transactions an adequate rating of risk, which is required by any proper regulatory policy.
The blog explained that the goal of these tools is to increase privacy coins’ privacy sustainability and safety by way of easy detection of criminal users.
Many Entities Eager For Monero Tracing
There are two major currencies within the criminal underbelly of the crypto space: Bitcoin (BTC) and XMR. Bitcoin is just a more convenient option, and XMR is quite regularly involved in illegal mining operations instigated by botnets.
Until now, there was no good way for law enforcement agencies to trace Monero, which spurred CipherTrace and firms like it to try and find a way. According to the reports, CipherTrace, in particular, has been investigating XMR transaction tracing since early 2019.
Dave Jevans stands as the CEO of CipherTrace, and has told the press back in August that it had developed the first-ever tool for Monero transaction tracking. The implications of such a tool are monumental, as it could reduce money laundering incidents and support criminal investigations.
The Monero tracing tools has been developed by the firm as part of a project being done with the US Department of Homeland Security. It should be noted that it’s not just the US seeking for a way to trace XMR transactions and wallets. The Internal Revenue Service had put up a bounty of $625,000, offering it to anyone that has the ability to break the Monero network’s privacy.
Monero Outreach had made a public statement about the potential for a Monero tracer, claiming that any such claims from a corporation are highly suspect. Indeed, as it stands now, the tracing tools of CipherTrace have not shown their abilities yet. Even so, Monero saw a 3.6% drop in price, currently trading at around $123.