- CipherTrace has invented a new tool that can allegedly identify users behind private Monero transactions.
- The tool was developed under the management of the US Department of Homeland.
- The Monero community is doubtful of the tool’s effectiveness.
CipherTrace has recently announced a Monero tracing tool that can allegedly recognize the users behind private transactions. The tool can do so by “visualiz[ing] Monero transaction flows.” However, Monero researchers are doubtful of the tool’s effectiveness.
CipherTrace CEO Dave Jensen has claimed that the tool can narrow down the users’ identities based on decoy elimination. It can then score transaction inputs and outputs and assign “risk levels” to various addresses. This allows investigators to figure out Monero users’ likely identities. CipherTrace developed the tool under the management of the US Department of Homeland Security (DHS). The company aims to use the platform for criminal investigations concerning illicit privacy-centric transactions.
Monero community, on the other hand, doubts that the tool is effective. According to a Crypto Briefing report, Monero researcher Sarang Noether said that CipherTrace has not provided “substantial details” to prove its effectiveness.
Without such details or evidence, it is not possible to assess what the tool does, or how well it does it. As a mathematician and cryptographer, I prefer to base my technical conclusions on data, not on press releases or unsubstantiated claims.
CipherTrace’s tool in question appears to depend significantly on off-chain data from external sources such as exchanges. According to the report, users who keep their personal data apart from their Monero address can expect reasonable privacy. However, governments and regulators are free to use the tool and arrive at their conclusions.
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