Home Coins Bitcoin (BTC) Ciphertrace Files 2 Patents for Systems to Identify Criminal Monero Transactions

Ciphertrace Files 2 Patents for Systems to Identify Criminal Monero Transactions

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Cryptocurrency intelligence firm Ciphertrace has filed two patent applications for tools and systems to trace monero transactions. The company aims to enable the detection of criminal uses of privacy coins like monero.

Monero Tracing Patents

Blockchain analytics and cryptocurrency intelligence firm Ciphertrace announced Friday that it has filed two monero tracing patents. One patent is called “Techniques and Probabilistic Methods for Tracing Monero” and the other is “Systems and Methods for Investigating Monero.”

They two patents cover a number of areas, including “Forensic tools to explore monero transaction flows to assist in financial investigations,” “Transaction visualization tools and ways to track stolen monero currencies or illicit monero,” and “Methodologies for gaining intelligence about transactions that rely on third-party nodes.” The crypto intelligence firm described:

Ciphertrace’s goal is to enable the detection of criminal users, therefore increasing the safety and sustainability of privacy coins like monero in the future.

Founded in 2015, the company has about 150 customers who are banks, crypto service providers, government agencies, and regulators. It is funded by the U.S. Department of Homeland Security (DHS), its website details.

Ciphertrace began developing these tools “within the scope of a Department of Homeland Security project” in early 2019, the firm clarified. “This project has laid the groundwork for future implementation of entity transaction clustering, wallet identification, exchange attribution, and other functionality that will provide law enforcement with even more tools for investigating monero transactions and addresses related to criminal activity.”

The company announced at the end of August that it had developed tools for the DHS “to track transactions of notoriously difficult-to-trace privacy coin monero (XMR).” However, XMR proponents disagreed.

Ciphertrace noted in Friday’s announcement that some Virtual Asset Service Providers (VASPs) find it difficult to take on the risk derived from monero’s privacy capabilities, opting to delist privacy coins than take on the extra compliance risks. Some cryptocurrency exchange platforms have delisted some privacy coins like monero in order to comply with the guidance issued by the Financial Action Task Force (FATF). Among them are Okex, Upbit, and Shapeshift.

The blockchain analytics firm elaborated:

Ciphertrace’s monero tracing capabilities will allow VASPs to identify when inbound XMR may have criminal origins, allowing them to adequately risk rate customer transactions per any required regulations.

What do you think about Ciphertrace filing monero tracing patents? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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