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The European Union Agency for Law Enforcement Cooperation, also known as Europol, has confirmed that Monero transactions remain anonymous as the agency is following the development of privacy coins.
Jerek Jakubcek, a strategic analyst of Europol’s European Cyber Crime Centre (EC3), shared the details during a Blockchain Alliance webinar that crypto transactions conducted on Monero cannot be traced or recorded.
Jakubcek went on by saying that these privacy obstacles have prevented investigators from tracking locations of suspects, and multiple cases have shown that the use of cryptocurrencies like Monero makes it difficult to gather information and trace the funds of the suspects.
Although other services like the Tor browser hide the IP address of the people who use it, Monero also hides additional information regarding transactions. This means that the IP addresses or the transactions themselves cannot be traced by anyone. Due to the nature of Monero, which makes it anonymous by default, many users are drawn to this digital currency, which is something other players in the privacy coin market like Dash and ZCash cannot offer to users.
Monero’s current market capitalization is calculated at around $810 million dollars and it is the most recognized and popular privacy coin, while other privacy coins such as DASH have the market capitalization of a little over $400 million dollars and ZCash with about $235 million dollars.
Europol has been successful in tracking the transactions of cryptocurrencies like Bitcoin and Ethereum, according to Jakubcek; he further elaborated that when investigating such cases, Europol uses a chain analysis simulator for the involved law enforcement agencies. His statement regarding the procedure has been received as a confirmation for the lack of privacy that is present on public blockchain platforms.
Converting Bitcoin/Ethereum to Monero to Avoid Detection
Jakubcek asserted that there were several Europol’s investigations concluding that Monero’s blockchain was the endpoint of these investigations. They suspect that this means that crypto funds from Bitcoin or Ethereum might be converted into Monero to avoid being monitored. He has called privacy coins a greater threat to security than popular cryptocurrencies in the market like Bitcoin or Ethereum.
Furthermore, as the EC3 official added, out of the top 120 exchanges for cryptocurrencies, the trade of privacy coins is only available in 32 percent. Out of the 32 percent in which privacy coins can be traded, 63 percent do not meet the standard for KYC provisions, which obviously prevent law enforcement’s tracers to be able to identify the suspected users. Just recently, the crypto exchange BitBay ended its support for Monero.
Europol has been very active in the fight against criminals who are exploiting cryptocurrencies. For instance Over the past several months, the agency has coordinated a multinational operation against a cryptocurrency-based dark web marketplace in which Monero had been one of the predominant digital currencies used.
Privacy coins have been under attack by regulators and law enforcement agencies for a long time due to their anonymity and difficulty in tracking and analyzing over the course of past few months.