Cryptocurrencies where it is impossible to find out from whom a certain payment comes, so-called privacy coins, are getting more and more difficult. The software company CipherTrace has succeeded in making transactions with the well-known privacy coin Monero visible on behalf of the American government. Also, more and more the trading platforms for crypto’s privacy coins.
Privacy coins, the ultimate crypto
Governments are not very keen on these coins such as Monero (XMR), ZDash and the Pirate Coin (with the applicable trading code ARRR), because it is possible to trade large flows of money under the radar.
Cryptocoins are indeed decentralized and you can only pay using a crypto account. But once you know which crypto account belongs to someone, it’s pretty easy to track all the payments you’ve ever made. That’s because every crypto transaction is kept in a publicly accessible log. Except with privacy coins.
This is different with Monero’s privacy coins. Transactions are obfuscated there, payments are made to several addresses at once, as it were, making it impossible to find out to which account exactly a payment has been made.
This explains the popularity of Monero among money launderers, other criminals and people who, for example, have a lower opinion of the government for political reasons.
CipherTrace cracks obfuscation privacy coin Monero
Unfortunately, or fortunately, this seems to no longer be possible with the crypto Monero. CipherTrace has now provided the US government with the tools to get around this.
But for all cryptos, they do keep a very big advantage. Namely that it cannot be seized without login details. With a bank account, for example, this can be done quite easily. For example, the Canadian government Trudeau was able to block the bank accounts of protesting truckers, but this was not possible with crypto donations.
There are of course also other privacy coins, such as the ARRR Pirate Coin mentioned. The arms race between privacy crypto enthusiasts and the government is likely to continue for a while.