CipherTrace claims to be able to trace Monero Transactions

[Abiky]

According to an article found at CoinTelegraph, cryptocurrency intelligence firm "CipherTrace" has developed a tool that can track & trace Monero transactions. Imagine this company being able to track every single XMR transaction on the Blockchain. It would be disastrous to people's privacy. After all, "CipherTrace" will be working closely with the US government using this surveillance tool. I'm sure XMR developers will find a way to strengthen privacy of the Blockchain after this recent news. But while we're at it, current on-going transactions' privacy can be compromised as we speak.

Do you think CipherTrace's surveillance tool will be able to successfully trace & trace every single XMR transaction performed on the Blockchain? If not, why? Do you think they're lying in order to scare people off Monero? Your input will be greatly appreciated. Thanks in advance.

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[ryzaadit]

Still a big question for me.

Always about the result or data when "CipherTrace" did it's really true or not about the data, still agree with one of the respond from "Menero Community" about the data from "CipherTrace" is legitimate and real or not unless the person who makes that's transaction confirmed the data from "CipherTrace" was right and belong to his address or data. IMO still hard to track all the transaction.

[Abiky]

Still a big question for me.

Always about the result or data when "CipherTrace" did it's really true or not about the data, still agree with one of the respond from "Menero Community" about the data from "CipherTrace" is legitimate and real or not unless the person who makes that's transaction confirmed the data from "CipherTrace" was right and belong to his address or data. IMO still hard to track all the transaction.

They'd still need to provide proof of their claims if they want the government to believe them. The Monero community is quite skeptical about this, as XMR's privacy techniques are quite battle-tested (which means it's not easy to take it down easily). If CipherTrace's analytics/surveillance tool works as intended, there's nothing stopping XMR developers from adopting a new privacy solution or improving the existing one to put the company's efforts in vain. This is possible thanks to the decentralized and open source nature of crypto. With network upgrades on the XMR blockchain taking place every 6 months, I doubt CipherTrace will be able to succeed at tracing Monero transactions at all. Only privacy coins that are compromised (like Zcash) can be easily traced by any company whatsoever. It's said that Zcash has a backdoor making it easier for the company behind it (Electric Coin Company) to expose ZEC transactions to the authorities. If that's true, then Zcash shouldn't be considered a privacy coin at all. Monero hasn't experienced such issues, making it the best privacy coin around. Which is why I strongly believe that it's nearly impossible to track & trace XMR transactions on the Blockchain.

Nonetheless, I wouldn't worry much about this since there's not much evidence to back the company's claims. Being the only one to come up with a tracing tool for Monero, has a lot to say about it. In case Monero becomes compromised, the community and developers could work together to increase privacy on the Blockchain. All of these news are just a failed attempt by governments, companies, and the mainstream media in order to scare people off privacy coins. But those who know what's behind this, will continue to patronize Monero no matter what. Let's hope XMR lasts for many generations. Just my opinion

[ryzaadit]

-snip-

Yeah, that's why not really believe what they said.

If so easy to track all the transaction, a scam, hacker and other criminal attempts could be easy to track down. Even with the only bitcoin when we are still can see the transaction public on the chain still kinda hard to be track all of these transactions.

[btc_angela]

On the contrary, I have seen this article as well:

CipherTrace’s Monero Tracking Tool Has Not Been Proven Effective, Researcher Says

Not as Effective as Claimed
Much of the Monero community doubts that the tool is as effective as CipherTrace claims.

Monero researcher Sarang Noether told Crypto Briefing that, in his opinion, CipherTrace has not provided “substantial details” that prove the effectiveness or scope of the tool:

“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.”

Ultimately, it does not appear that CipherTrace is capable of deriving user identities from basic wallet addresses and transaction data—certainly not to the same extent that it can identify Bitcoin users.

Instead, it seems that CipherTrace’s tool depends greatly on off-chain data from exchanges and other sources. Users who keep their personal data separate from their Monero address can expect reasonable privacy.

That said, governments and regulators are free to use the tool and reach their own conclusions. CipherTrace says that the tool has already been used in several investigations.

https://cryptobriefing.com/ciphertraces-monero-tracking-tool-isnt-effective-researcher-says/

So I guess it still up for debate and there are ways to get around it if you used Monero the 'right way' to make your private and hide your identity.

[truthofshunya]

On the contrary, I have seen this article as well:

CipherTrace’s Monero Tracking Tool Has Not Been Proven Effective, Researcher Says

Not as Effective as Claimed
Much of the Monero community doubts that the tool is as effective as CipherTrace claims.

Monero researcher Sarang Noether told Crypto Briefing that, in his opinion, CipherTrace has not provided “substantial details” that prove the effectiveness or scope of the tool:

“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.”

Ultimately, it does not appear that CipherTrace is capable of deriving user identities from basic wallet addresses and transaction data—certainly not to the same extent that it can identify Bitcoin users.

Instead, it seems that CipherTrace’s tool depends greatly on off-chain data from exchanges and other sources. Users who keep their personal data separate from their Monero address can expect reasonable privacy.

That said, governments and regulators are free to use the tool and reach their own conclusions. CipherTrace says that the tool has already been used in several investigations.

https://cryptobriefing.com/ciphertraces-monero-tracking-tool-isnt-effective-researcher-says/

So I guess it still up for debate and there are ways to get around it if you used Monero the 'right way' to make your private and hide your identity.

I saw a lot of noise being made in the Beam community, perhaps someone knowledgeable from the Beam community might have a better take on this.

[Kakmakr]

They say the proof is in the pudding ... right. We will have to see if this tool is going to lead to some "big" court cases and then this evidence will have to be used in court to prosecute people who used Monero for illegal purposes. 

It might once again be "user error" ...where the "user" ordered something online with Monero and then provided his physical address for delivery and then re-used the same address to buy something illegally again and they linked the "legal" transaction with the "illegal" transaction in that way.

Most of these criminals make these types of mistakes and then they are caught through their own stupidity. A Perfect example was Ross Ulbricht (Silkroad) ...he used his email address for something that could be linked back to him and used the same address on Silkroad. 

[NeuroticFish]

We will have to see if this tool is going to lead to some "big" court cases and then this evidence will have to be used in court to prosecute people who used Monero for illegal purposes. 

Very well pointed out.
Each of the 2 parts' declarations are clearly biased, but if something like ^^ that will happen then yes, the tool is good.
However, I also have my doubts, I think that they use Monero name only as advertising / to increase the awareness about their tool.

[Myleschetty]

We will have to see if this tool is going to lead to some "big" court cases and then this evidence will have to be used in court to prosecute people who used Monero for illegal purposes. 

Very well pointed out.
Each of the 2 parts' declarations are clearly biased, but if something like ^^ that will happen then yes, the tool is good.
However, I also have my doubts, I think that they use Monero name only as advertising / to increase the awareness about their tool.

They only used Monero to advertise themselve and if the tools they asserted can trace Monero transactions. Why would the United States Internal Revenue Service (IRS) offer $625,000 bounty to anyone or groups that can develop another tool that can track illegal cryptocurrency transactions and people avoiding tax through Monero?

[Casdinyard]

According to an article found at CoinTelegraph, cryptocurrency intelligence firm "CipherTrace" has developed a tool that can track & trace Monero transactions. Imagine this company being able to track every single XMR transaction on the Blockchain. It would be disastrous to people's privacy. After all, "CipherTrace" will be working closely with the US government using this surveillance tool. I'm sure XMR developers will find a way to strengthen privacy of the Blockchain after this recent news. But while we're at it, current on-going transactions' privacy can be compromised as we speak.

Do you think CipherTrace's surveillance tool will be able to successfully trace & trace every single XMR transaction performed on the Blockchain? If not, why? Do you think they're lying in order to scare people off Monero? Your input will be greatly appreciated. Thanks in advance.

I'm a little confuse with the contradiction of your first paragraph with your last questions, as you've mentioned an article stating such events but still managed to doubt its existence and legitimacy. But yeah, IMO, I think they really are just fooling with XMR. Though if they really managed to pull off and make their own tool to know all XMR transactions, it wouldn't just be a risk to the users, but rather to the main XMR crypto itself. Their system and uniqueness among other crypto is breached, hence there is no chance that their Monero tracked system wouldn't be different from other systems out there. And if they just want to scare people to not use Monero, they shouldn't pull the stunt first publicly publishing the tool.. right?

[Lordhermes]

I'm sure XMR developers will find a way to strengthen privacy of the Blockchain after this recent news.

Aren't these developers suppose have taking permission from Monero XMR teams before undergoing this development?, what is actaully the concern of these so called CipherTrace developers to troop or rather pry in another company transaction tracing policy.
Although, what might have caused this check and follow up on Monero transactions are the illicit acts done through XMR, and some crypto exchange had delisted XMR from their exchange for some malicious acts according to the article, XMR is anonymous and not transparent as Bitcoin and other cryptocurrency is as pseudonymous which will destroy their uniqueness among others in the crypto space.

[Twinkledoe]

We will have to see if this tool is going to lead to some "big" court cases and then this evidence will have to be used in court to prosecute people who used Monero for illegal purposes. 

Very well pointed out.
Each of the 2 parts' declarations are clearly biased, but if something like ^^ that will happen then yes, the tool is good.
However, I also have my doubts, I think that they use Monero name only as advertising / to increase the awareness about their tool.

Wondering if this Cipher team will apply for the bounty offered by the IRS to crack monero. That's a huge money and a very attractive reward. Because if they are confident about their tool, they can always claim the bounty, right?

https://news.bitcoin.com/irs-to-pay-625k-to-crack-monero-crypto-proponents-scoff-at-contract/

[NeuroticFish]

They only used Monero to advertise themselve and if the tools they asserted can trace Monero transactions. Why would the United States Internal Revenue Service (IRS) offer $625,000 bounty to anyone or groups that can develop another tool that can track illegal cryptocurrency transactions and people avoiding tax through Monero?

Indeed 

Wondering if this Cipher team will apply for the bounty offered by the IRS to crack monero. That's a huge money and a very attractive reward. Because if they are confident about their tool, they can always claim the bounty, right?

I would be overly surprised if they'd do that.
I also advise you find better sources for your news, I would not trust anything coming from bitcoin-dot-com website.

[qwizzie]

They only used Monero to advertise themselve and if the tools they asserted can trace Monero transactions. Why would the United States Internal Revenue Service (IRS) offer $625,000 bounty to anyone or groups that can develop another tool that can track illegal cryptocurrency transactions and people avoiding tax through Monero?

Indeed  

Wondering if this Cipher team will apply for the bounty offered by the IRS to crack monero. That's a huge money and a very attractive reward. Because if they are confident about their tool, they can always claim the bounty, right?

I would be overly surprised if they'd do that.
I also advise you find better sources for your news, I would not trust anything coming from bitcoin-dot-com website.

Here you go : https://cointelegraph.com/news/the-irs-offers-a-625-000-bounty-to-anyone-who-can-break-monero-and-lightning

To get back to OP topic : I do wonder why the US Department of Homeland Security would take a tracing tool into contract (meaning they pay for it), if such tracing tool is supposedly not.. working  
To me it seems more likely that it does work, to a certain degree.

According to Jevans, the tool, which has been in development for over a year, will be used by the U.S. Department of Homeland Security to trace Monero transactions. He noted that CipherTrace’s recent contract with DHS Science & Technology Directorate resulted in the development of forensic tools for law enforcement and government agencies to trace Monero transaction flows for criminal investigations:

“The tools include transaction search, exploration and visualization tools for Monero transaction flows that have been integrated with CipherTrace’s inspector financial investigations product.”

Source : https://cointelegraph.com/news/ciphertrace-develops-monero-tracing-tool-to-aid-us-dhs-investigations

I suspect US exchanges will put a lot of accounts on hold. Acounts who get flagged by this tracing tool, resulting in these exchanges asking users for additional information before allowing them to withdrawal.

[NeuroticFish]

Here you go : https://cointelegraph.com/news/the-irs-offers-a-625-000-bounty-to-anyone-who-can-break-monero-and-lightning

Thank you, I've read myself the news some time ago somewhere. And I didn't say the news is fake. My advice was for the safety of that guy. Sorry if it was misinterpreted.

[Abiky]

On the contrary, I have seen this article as well:

CipherTrace’s Monero Tracking Tool Has Not Been Proven Effective, Researcher Says

...

https://cryptobriefing.com/ciphertraces-monero-tracking-tool-isnt-effective-researcher-says/

So I guess it still up for debate and there are ways to get around it if you used Monero the 'right way' to make your private and hide your identity.

I'm not surprised about this at all. Since the company (CipherTrace) is unable to provide proof of their claims, we can feel confident that Monero transactions are 100% private. Still, the responsibility lies in the person himself. If you're careless by not preserving your anonymity on the Monero blockchain, you can easily get caught. I think surveillance/analytics companies will be able to track Monero transactions through centralized exchanges, though. Outside this scope, they won't have any luck at all. Imagine if people started using decentralized exchanges and conducting XMR transactions without a middleman. It would be a nightmare for both governments and surveillance companies as we speak.

CipherTrace may be claiming to trace Monero transactions just to bring governments' attention (and to scare off Monero users too). No matter what their efforts are, Monero will continue to improve in the future. That's thanks to its decentralized and open source nature. With a plethora of developers working on it, Monero will remain the best privacy coin in the world. Let's hope that it stays that way in order to render government surveillance efforts completely useless in the long run. Just my thoughts

[qwizzie]

Chainalysis and Texas firm win million-dollar IRS contract to crack Monero
https://cointelegraph.com/news/chainalysis-and-texas-firm-win-million-dollar-irs-contract-to-crack-monero

On Wednesday, the IRS awarded two $625,000 contracts looking for tracing tools for privacy token Monero and Layer 2 protocols.
The winners were blockchain analytics firms Chainalysis and Integra FEC.

The IRS initially publicized its quest for a privacy-busting analytics solution at the beginning of the month. An IRS representative told Cointelegraph
that the agency had selected the two winning firms out of a field of 22 proposals received, though the only rationale the representative gave for the
agency’s decision was “comparative analysis was used.”

Chainalysis is among the leading firms in crypto analytics and routinely wins such contracts with a range of government agencies. Integra FEC is a relatively
unfamiliar name, despite millions of dollars in contracts with, for example, the Securities and Exchange Commission for “Other Scientific and Technical Consulting Services.”

A bit surprising to me is that it is not CipherTrace getting the reward after all. These other two companies (Chainanalysis & Integra FEC) must have developed an even better solution to tracking Monero transactions.
It could also be that one company focused on cracking Monero and the other company focused on cracking the Lightning Network.

There is however one simple conclusion to draw from this news : Monero transactions are to be considered trackable and traceable from now on !!

[babykika2027]

Nothing more than speculation. We need proofs!

[Yaunfitda]

Yes, it was not not Ciphertrace we do get the reward, actually I have a thread here: SEC offered a 625K bounty for a tool to track LN and Monero. And someone already updated us as to what company get the bounties. I'm sure CipherTrace was disappointed as they are not chosen, but it doesn't mean they've lost in this battle. Maybe they can offer better tools in the future, so the race is still on.

[Abiky]

Chainalysis and Texas firm win million-dollar IRS contract to crack Monero
https://cointelegraph.com/news/chainalysis-and-texas-firm-win-million-dollar-irs-contract-to-crack-monero

On Wednesday, the IRS awarded two $625,000 contracts looking for tracing tools for privacy token Monero and Layer 2 protocols.
The winners were blockchain analytics firms Chainalysis and Integra FEC.

The IRS initially publicized its quest for a privacy-busting analytics solution at the beginning of the month. An IRS representative told Cointelegraph
that the agency had selected the two winning firms out of a field of 22 proposals received, though the only rationale the representative gave for the
agency’s decision was “comparative analysis was used.”

Chainalysis is among the leading firms in crypto analytics and routinely wins such contracts with a range of government agencies. Integra FEC is a relatively
unfamiliar name, despite millions of dollars in contracts with, for example, the Securities and Exchange Commission for “Other Scientific and Technical Consulting Services.”

A bit surprising to me is that it is not CipherTrace getting the reward after all. These other two companies (Chainanalysis & Integra FEC) must have developed an even better solution to tracking Monero transactions.
It could also be that one company focused on cracking Monero and the other company focused on cracking the Lightning Network.

There is however one simple conclusion to draw from this news : Monero transactions are to be considered trackable and traceable from now on !!

That sucks. Unless the involved companies disclose Monero's flaws to the community, it'll be impossible to counteract their efforts. While I doubt these entities will be able to successfully track & trace all Monero transactions, nothing is perfect. In other words, there's no such thing as 100% anonymity. I believe that Chainalysis and Integra FEC will be only be able to perform the task successfully by hunting down centralized exchanges. It's the only way I can think of, since the core Blockchain network has built-in encryption and mixing techniques that are often hard to crack. But with a hefty sum of $625k, anything's possible. These companies can hire the best hackers in the world in order to break through Monero's core Blockchain network if they wish. After all, Monero is not backed by an immense hashrate unlike Bitcoin.

Nonetheless, developers will need to focus on making Monero stronger by adopting new privacy techniques in order to render government's efforts useless. As long as the core Blockchain network is constantly updated, companies will have a hard time trying to find new ways to crack it. Personally, I wouldn't worry much about companies tracking down Monero as I've got nothing to hide. But the rest of the people won't think this way. It'll be "survival of the fittest" as Monero battles its way towards maintaining privacy against oppressive governments in the mainstream world. I hope Monero will ultimately win, making governments look elsewhere. By all means, CipherTrace got unlucky even when it claimed to be able to successfully track & trace Monero transactions. It could've been that they were unable to provide proof to sustain their claims. Now that Chainalysis and Integra FEC have taken the lead in Monero surveillance, CipherTrace could just be another nail in the coffin. Just my opinion