SEC offered a 625K bounty for a tool to track LN and Monero

[mk4]

I reckon the privacy aspect of bitcoin will be a cat and mouse game that always ends with the cat tracing the transactions.

For now, sure. But let's not completely underestimate what kind of innovation the developers can do to help Bitcoin's privacy sometime in the future.

[1714572175]

1714572175

[1714572175]

1714572175

[Yaunfitda]

What do you think of this? Will some ethical hackers stepping and developed a tool if possible?

It is not that surprising to see that the government is willing to spend huge amounts to crack these things and i have seen articles and threads in this forum about some company planning to release tools that would track monero and other similar privacy related coins and if those claims are true then it is possible these big money can make changes.

Given the amount though, I have second thoughts about it, seems that this is just small compare to the crypto that there are going to seize, intercept from criminals or from tax evasions. So it's nothing, budget wise as well as we all know that they got millions and millions of budget every year. So it's a win win situation for them. So let's see how it goes, specially breaking down the Monero privacy protocol.

[yazher]

There are many blockchain analysis services these days, so i'm sure someone will be interested with the offer.

Tracking LN isn't that hard though, you just need become node with biggest balance available with some incentive that makes Bitcoiner connect to your node (such as major exchange or merchant)

With that lots of bounty, Im sure somebody will take that offer but mostly it should be a team work because doing such thing alone cannot be done because the job is more complex for a one person job. They really put some effort on this one, maybe they are going for something big this time. It should be easy for someone who was involved on those project because they might know something to make that tool to work.

[bbc.reporter]

I reckon the privacy aspect of bitcoin will be a cat and mouse game that always ends with the cat tracing the transactions.

For now, sure. But let's not completely underestimate what kind of innovation the developers can do to help Bitcoin's privacy sometime in the future.

Sometime in the future, yes. It will certainly be harder for bitcoin with the type of development preferring on the more moderate side, I reckon. Monero developers do hard forks every 6 months since the beginning.

The IRS should not scare the bitcoiners in the richlist. They might hide in Monero hehehe.

https://localmonero.co/blocks/richlist

[Shasha80]

An interesting offer from the SEC, I'm sure there will be bounty hunters who are interested in making a tool to track LN and Monero.
Although it is not easy to make a tool like that in my opinion, but it is possible to be able to make a tool like that.This is one of
the big breakthroughs that the SEC has made in my opinion, they are getting serious about dealing with the scammers that occur
in the crypto world. It would be good if the tool was successfully created in the end, because it will reduces the number of scammers
currently circulating.

[pooya87]

it is kind of funny to watch this never ending battle between the government wanting to constantly invade regular people's privacy and the people wanting to keep their privacy and keep the government out of it.
of course the funny part is not this battle itself, it is all the real criminals that keep doing whatever the hell they want while the government is busy snooping in the lives of regular people with no criminal intent.

good for all these crappy blockchain analysis companies that are going to take SEC money easily though.

[Fundamentals Of]

So I hope SEC will make use of such tools to effectively discourage and trace the crypto criminals.

And monitor everybody's movements. This is a desperate attempt for the SEC to catch up with cryptocurrency. They are now admittedly several steps behind. They need to up the ante and now they are into offering bounty to anyone who would play Judas. This bounty thing makes everything in Monero and LN look like a criminal or syndicate thing.

They just can't let the people live in private.

[bbc.reporter]

An interesting offer from the SEC, I'm sure there will be bounty hunters who are interested in making a tool to track LN and Monero.
Although it is not easy to make a tool like that in my opinion, but it is possible to be able to make a tool like that.This is one of
the big breakthroughs that the SEC has made in my opinion, they are getting serious about dealing with the scammers that occur
in the crypto world. It would be good if the tool was successfully created in the end, because it will reduces the number of scammers
currently circulating.

According to your wise analysis, on what percentage of possibility will this bounty, paid for by the American tax payers, create a successful tool to trace transactions in Monero? Is it high?

[bryant.coleman]

According to your wise analysis, on what percentage of possibility will this bounty, paid for by the American tax payers, create a successful tool to trace transactions in Monero? Is it high?

Even if someone is able to do that (tracing), SEC/FBI won't get anything in return. The vast majority of the transactions in dark market still uses either BTC or ETH. And exchange liquidity with XMR is so low, that most of the trade is occurring outside the exchanges. Let's assume that SEC manages to trace a few XMR transactions. The users are then going to move to another anonymous coin, such as Veil or Deep Onion. I would advise the SEC to spend that money on something which is more productive.

[amishmanish]

There was also talk about that 6900 BTC wallet being passed around hacker to hacker, with no one being able to crack the wallet.dat for over two years, and IBM claiming they'd only need 2.5 days if they tried (but obviously talking out of their ass even with quantum computing).

IBM breaking open wallet files is new to me. I thought they were just another cloud computing company with a lot of customers. I know for one thing that IBM only ventures in low-risk professions, and brute forcing passwords doesn't exactly sound like a comfy profit cushion to me. Also weird is them getting involved in this black-hat activity. Surely, the government must've wanted to seize the wallet file and contract private companies for the task if IBM was poking its head in there.

IBM has been pretty aggressive about quantum computing. They have a lot of introduction about it on their website. They probably dont want to go lose the next processor battle like the transition from mainframes to PCs and are hence active in marketing quantum computing. We will have to see the exact link about what IBM said on breaking wallet in 2.5 days. They probably mean that IF theh can use QC to break SHA-256, they could break the wallet.

This bounty from IRS is interesting regarding LN. Aren't LN transactions connected to the on-chain funding/ closing transaction??  Alsk, if IRS wants to trace LN, it means they expect a lot of use in coming times which is well, good news for bitcoin and us.

[bbc.reporter]

According to your wise analysis, on what percentage of possibility will this bounty, paid for by the American tax payers, create a successful tool to trace transactions in Monero? Is it high?

Even if someone is able to do that (tracing), SEC/FBI won't get anything in return. The vast majority of the transactions in dark market still uses either BTC or ETH. And exchange liquidity with XMR is so low, that most of the trade is occurring outside the exchanges. Let's assume that SEC manages to trace a few XMR transactions. The users are then going to move to another anonymous coin, such as Veil or Deep Onion. I would advise the SEC to spend that money on something which is more productive.

I cannot assume the unassumable hehehe.

I reckon anyone who has been in the cryptospace for long enough know that Monero is the only legitimate anonymous coin. I do not know about Veil or Deep Onion, however, most of the other anonymous coins' privacy and anonymity claims are weak.

Also comedy news hehehehe.


Per its Wednesday additions to its list of sanctioned individuals, the United States Treasury Department is targeting Monero (XMR) addresses.

Russian nationals Dmitriy Karasavidi and Danil Potekhin have become the newest names on the specially designated nationals list. According to the Treasury’s announcement on the subject, the two engineered an elaborate phishing campaign targeting U.S. citizens in 2017 and 2018.

Both parties had a number of cryptocurrency addresses including Bitcoin (BTC) and Ether (ETH), as well as Zcash (ZEC) and Litecoin (LTC). Surprisingly, Karasavidi’s information includes a Monero address: 5be5543ff73456ab9f2d207887e2af87322c651ea1a873c5b25b7ffae456c320.

Given Monero's famous built-in privacy features, this is a huge step for sanctions. Unfortunately for the Treasury, that XMR "address" is not an address at all, but rather a payment ID.

Source https://cointelegraph.com/news/new-us-treasury-sanctions-on-russian-hackers-hit-monero-address

[TravelMug]

Ok it seems that it was awarded to two companies.

Award Details
Contract Award Date: Sep 30, 2020
Contract Award Number: 2032H8-20-C-00040_2032H8-20-C-00041
Task/Delivery Order Number:
Contractor Awarded Unique Entity ID (DUNS):
Contractor Awarded Unique Entity ID (SAM):
Contractor Awarded Name: INTEGRA FEC LLC and CHAINALYSIS INC.
Contractor Awarded Address: Washington, DC 20005 USA
Base and All Options Value (Total Contract Value): $625000.00

https://beta.sam.gov/opp/5ab94eae1a8d422e88945b64181c6018/view

So let's see how it goes, https://www.integrafec.com/ bolstered itself as "forensic data analytics" company that helps a lot of government agencies already. We are all familiar with Chainalysis already. They even said that they have broken Zcash or Dash or at least track 99% of all transactions. And with the award, everyone will be waiting for the supposedly tools that will help out IRS or SEC.

Can they deliver it within 8 months is the big question here.

[Crypto_lion]

An interesting offer from the SEC, I'm sure there will be bounty hunters who are interested in making a tool to track LN and Monero.
Although it is not easy to make a tool like that in my opinion, but it is possible to be able to make a tool like that.This is one of
the big breakthroughs that the SEC has made in my opinion, they are getting serious about dealing with the scammers that occur
in the crypto world. It would be good if the tool was successfully created in the end, because it will reduces the number of scammers
currently circulating.

I agree that although currently there are no tools available for tracking these  what the government is trying to do is to prevent money laundering and dark web activities using these privacy coins. Dark web and money laundering are serious threats to world economy and it must be wiped out not just in fiat but also in any digital economy. As for people who advocate for privacy maybe there is a better way to deal with this .

 I am all ears to listen to any ussgestions.

[Yaunfitda]

Ok it seems that it was awarded to two companies.

Award Details
Contract Award Date: Sep 30, 2020
Contract Award Number: 2032H8-20-C-00040_2032H8-20-C-00041
Task/Delivery Order Number:
Contractor Awarded Unique Entity ID (DUNS):
Contractor Awarded Unique Entity ID (SAM):
Contractor Awarded Name: INTEGRA FEC LLC and CHAINALYSIS INC.
Contractor Awarded Address: Washington, DC 20005 USA
Base and All Options Value (Total Contract Value): $625000.00

https://beta.sam.gov/opp/5ab94eae1a8d422e88945b64181c6018/view

Thanks for the update, I'm not surprised that Chainalysis collared the $625k bounty. They've been making a lot of noise lately and they have been in the forefront on developing softwares for anti money laudering. I'm not familiar with Integra though, but it seems that they have the reputation behind their name. As for the 8 months delivery, they don't have a choice, maybe it could be a rush tools, or maybe they've already build a working model and now they can deploy it with data and see if it working as designed.