This week, the Finnish news portal MTV Uutiset published an alarming article about the cryptocurrency Monero (XMR). According to journalists, the National Investigation Bureau (KRP) of Finland managed to trace transactions in XMR and reveal some data about its users. However, upon analyzing the article in detail, it becomes clear that this is not a complete violation of the key principles of altcoin transfer encryption.
This week, the Finnish news portal MTV Uutiset published an alarming article about the cryptocurrency Monero (XMR). According to journalists, the National Investigation Bureau (KRP) of Finland managed to trace transactions in XMR and reveal some data about its users.
However, upon analyzing the article in detail, it becomes immediately clear that this is not a complete violation of the key principles of altcoin transfer encryption.
How Anonymity is Organized in Monero
Not long ago the Monero cryptocurrency community faced serious problems. In November 2023 it became known that funds had been stolen. They were intended for crowdfunding new solutions in the project ecosystem. The hacker embezzled 2,675.73 XMR, which was equivalent to $460,000 at the time.
Exactly how this happened is unknown. However, only two people had access to a specific wallet. The secret combination to manage the content of the address should not fall to someone else.
As a result, the incident turned out to be extremely unpleasant, but the problems were resolved. The project representatives returned the stolen amount from the main project fund.
Monero provides a high level of anonymity through the use of so-called ring signatures and shadow addresses.
Ring signatures allow you to create groups of signatures where the actual sender of the funds cannot be precisely identified. This is achieved by including multiple potential senders in the transaction signature, making it difficult to isolate the actual sender.
What Is Finland Investigating About Monero?
In addition to ring signatures, the Monero network also uses sensitive addresses to protect recipients. In short, a unique address is created for each transaction, providing an additional layer of anonymity. It is only used once, making it difficult to analyze the flow of funds.
Ring Confidential Transactions (RingCT) technology is implemented to hide transaction amounts. It ensures that transaction amounts remain invisible to outsiders, while maintaining the functionality of the blockchain.
The Monero team implemented their project so well that no government agency has been able to fully analyze the transaction.
Can Monero Be Hacked?
KRP officials examined transactions at the address related to a hacker’s hack and subsequent extortion of funds from the Finnish psychotherapy clinic Vastaamo. The case in question dates back to 2020, when hackers twice stole data from the company and threatened to reveal private patient information unless the company paid them a ransom.
KRP declined to comment on the details of the Monero “hack.” Most likely, they do not have a universal formula for tracking all financial flows in the cryptocurrency network, and the results obtained were a matter of luck.
Monero Removed from Exchanges
In early January 2024, the management of the OKX cryptocurrency exchange removed almost all anonymous cryptocurrencies from trading. The coins in question are FSN, ZKS, CAPO, CVP, XMR, DASH, ZEC and ZEN.
In early 2024, Binance stated in a blog post that Monero, Zcash and other sensitive coins “exhibit significantly greater volatility and risk than other tokens” and “are at risk of not complying with the listing criteria.”
By Leonardo Perez
