By Tobi Loba
CipherTrace, a blockchain analytics firm, is developing tools to track the transactions of the world’s largest privacy token, Monero (XMR). And in less than two years, the firm has filed two different patent applications to this effect.
In a press release, CipherTrace reveals that it filed applications for two cryptocurrency tracing patents: “Techniques and Probabilistic Methods for Tracing Monero” and “Systems and Methods for Investigating Monero.”
Monero employs several techniques to hide the identity of the XMR sender, mask the transaction amount, and keep the details of the receiver hidden through features such as ring signatures, ring confidential transactions, and stealth addresses. Ultimately, Monero makes it possible to hide every detail of a transaction.
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The two patents seek to uncover Monero transactions by using forensic tools to examine XMR transfer flows. The methods also reduce Monero decoys and use statistical techniques to cluster the likely owners of the coins.
In addition, the patents enable users to actively participate in the Monero network to gather intelligence as well as use visualization tools to track illicit XMR tokens.
According to CipherTrace, they have been developing the tools since early 2019 to support the U.S. Department of Homeland Security in its broader efforts to crack down on Monero transactions related to criminal activity.
While Bitcoin remains the top cryptocurrency used by criminals to cover their transactions, Monero has now captured 45% of the darknet markets mainly because of its privacy-centric features that employ unique designs to protect and ensure the complete anonymity of its users, says CipherTrace.