News - Authorities trace Monero transactions

By Mike Hesp

Authorities trace Monero transactions

Scams, crime and fraud
Wallets and Whales

The privacy coin Monero is considered untraceable. Now researchers in Finland may have cracked the code. What happened?

According to local reports, the Finnish investigative agency Keskusrikospoliisi has been monitoring Monero XMR transactions in connection with the criminal case against Julius Aleksanteri Kivimäki. The prosecutor's office recently presented new evidence that would show a crypto trail to Kivimäki's bank account.

In October 2022, the hacker reportedly paid 40 Bitcoin (about 450,000 euros at the time) in exchange for not releasing the data of more than 33,000 patients of the psychotherapy service provider Vastaamo. When the ransom was not paid, Kivimäki allegedly targeted individual patients as well.

According to Finnish police, Kivimäki received BTC payments and sent the funds to an exchange that did not comply with KYC guidelines. He then exchanged them for Monero and transferred the money to a special Monero wallet.

He repeated this process several times so that the funds were converted back into Bitcoin and moved to different wallets. The complicated use of Monero in this case highlights the challenges authorities face in tracking XMR transactions.

Monero is known for its strong privacy features and is even said to be untraceable, according to the official website. Privacy-enhancing technologies include Ring Confidential Transactions (RingCT), ring signatures and stealth addresses.

RingCT mixes transactions to hide the origin of the money, while ring signatures hide the identity of the sender among a group of possible senders. Stealth addresses, however, make tracking even more difficult because a separate address is generated for each transaction.

This level of anonymity has not only attracted many users with a focus on privacy, but also the attention of the authorities. However, the Finnish researchers have not yet released further details about their on-chain analysis.

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