CiperTrace, the blockchain intelligence firm that previously gave the feds so-called “Monero-tracing tools," filed their second Monero-tracing patent application. The company says their tools help law enforcement identify Monero transactions associated with criminal activity. According to a press release on the company’s website, the patents cover: Forensic tools to explore Monero transaction flows to assist in financial investigations. Development of original tracing methodologies based on simulation techniques and Bayesian approaches.
The Department of Justice filed a civil complaint to forfeit 69,370 Bitcoin linked to the Silk Road. A few days ago, the blockchain analytics firm CipherTrace spotted two transactions sent from Bitcoin addresses associated with the Silk Road marketplace. On November 5, 2020, the U.S. Attorney’s Office Northern District of California announced the filing of a civil complaint to forfeit thousands of Bitcoin, Bitcoin Cash, Bitcoin Gold, and Bitcoin SV. Law enforcement seized the Bitcoin on November 3.
Someone transferred 69,370 Bitcoins, worth about one billion dollars, from a wallet associated with the Silk Road darkweb marketplace. According to a report from the blockchain intelligence firm CipherTrace, 69,370 Bitcoin from the Silk Road moved on November 3, 2020. The move is the first activity since April 2015. The party responsible for initiating the transfer sent the Bitcoins via the following transactions: 0d13a52e3b640d05cdf31b41f335b327f126cb79d9eec1e2bc46556ef30a0b57 3f036ff88bb851b57a1e28780dbce35a6457a8b57995c095b55b3b0cf48ba9fd The coins moved from the address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx to the address bc1qa5wkgaew2dkv56kfvj49j0av5nml45x9ek9hz6 in two transactions.
The United States Internal Revenue Service is offering $625,000 for Monero-tracing software, according to a recently published proposal request. In the proposal request, the IRS described the need for “innovative solutions for tracing and attribution of privacy coins,” including Monero and the Bitcoin Lightning Network. The use of privacy coins is becoming more popular for general use, and is also seeing an increase in use by illicit actors,” the IRS wrote in the proposal.
CipherTrace, a self-described “Blockchain Forensics Team,” reportedly created “Monero tracing” tools for the U.S. Department of Homeland Security. Below is the relevant portion of the press release (also available here). CipherTrace’s contract with DHS Science & Technology Directorate resulted in the development of forensic tools for law enforcement and government agencies to trace and visualize Monero transaction flows for criminal investigations. CipherTrace developed tools to explore Monero transactions to assist in investigations.
An Orange County man admitted laundering up to $25 million through a network of unlicensed Bitcoin ATMs and in-person exchanges. The defendant, Kais Mohammad, knew many of his customers laundered the proceeds of crime through his Bitcoin exchange network. Kais Mohammad, 36, of Orange County, California, pleaded guilty on July 22 to one count of operating an unlicensed money transmitting business, one count of money laundering, and one count of failure to maintain an effective anti-money laundering program.
The United States Secret Service is purchasing blockchain analytics software from Coinbase, a well-known digital currency exchange. According to publicly available spending records from the United States government, the United States Secret Service awarded a four-year contract to Coinbase earlier this year for access to Coinbase Analytics, the company’s in-house blockchain analytics software. According to The Block, the company created Coinbase Analytics after acquiring Neutrino, a blockchain intelligence platform, in 2019.
Binance temporarily suspended the account of a customer for withdrawing Bitcoin to Wasabi Wallet. The user had to provide their reason for using Wasabi and promise not to use any “gambling, P2P, [or] darknet/mixer sites.” The user, @bittlecat on Twitter, tweeted screenshots of the messages sent from the exchange as well as those sent in response to Binance’s inquiries. Binance CEO Changpeng Zhao provided validity to the user’s claim by replying to the tweet and effectively ruling out the possibility that @bittlecat had faked the interaction.
On November 18, the official download site for the Monero CLI served a malicious binary for less than an hour. The malicious version of the download was designed to steal Monero from unsuspecting victims. An entity compromised the box responsible for serving official binaries for the Monero CLI. The date of the breach has not been disclosed publicly as of this article. On November 18, an attacker—most likely the same one responsible for the breach—switched the legitimate binary for the infected version.
The German Federal Ministry of Finance claimed that Monero and other privacy coins make tracing money impossible and thus lend themselves to criminal activity on the darkweb, money laundering, and terrorist financing. The report highlighted the lack of anonymity provided by Bitcoin as the reason for the growing popularity of privacy coins. Darkweb market users still use Bitcoin more than any other cryptocurrency; the current popularity of Bitcoin in this context is apparent even without the reports from government agencies and blockchain analysis firms.