The firm indicated that it can obtain information on protected transactions in Dash and Zcash. They will investigate about USD 1.5 billion of the daily trading volume.
In recent days, the blockchain intelligence and research firm Chainalysis reported that it will track private transactions in the cryptocurrency projects Dash and Zcash.
The company said on its website that it already offers “investigation support” on its Reactor platform and the “Know Your Transaction” (KYT) protocol. This means that they will be able to investigate the transactions of both currencies in the market, with an estimated volume of USD 1.5 billion, in case one of their supervisory customers requires it.
Chainalysis explains that mixed transactions are very easy to detect and identify on the Dash blockchain. Since the said transactions are still public and transparent, the same techniques used to analyze CoinJoin transactions in Bitcoin can be used in the case of Dash. In other words, whilst PrivateSend increases the privacy of its users, a successful investigation is still possible.
Regarding Zcash, Chainalysis reported that 0.9% of all transactions are protected at all levels, that is, the sender, the receiver, and the amount of the transaction. The percentage of use of PrivateSend in Dash is 9% of the total transactions.
Concerning the protection that the protocol uses, the lack of clarity in Zcash is stronger due to the zk-SNARK encryption. However, Chainalysis can still provide the transaction value and at least one address for over 99% of ZEC’s activity.
The company reminded us that shielded or private transactions are optional in both systems. Furthermore, the objective of these encryption functions is to make the tracking process more difficult.
On the Dashpay Reddit, an enthusiast expressed his doubts about whether Dash’s privacy feature is really useful. He also questioned the fact that that a company can determine information about transactions that should be kept private.
User gz335o noted that non-owners of masternodes can read that information. This shows that PrivateSend is very weak, and so its use makes no sense. Dash Core Group may spend months preparing a proposal to give owners of masternodes a raise, but they will not be able to provide resources to improve the financial privacy of the end-user.
There were also reactions to Zcash regarding the service that Chainalysis already provides. Twitter user @ahmed_tomic referred to the rights that users have to keep their data secure. He posted on the social network that the Zcash shielded addresses should be able to protect people, as that is their right.
Last May, Daniel Cartolin, Chainalysis business representative for Latin America, talked about regulators, regulatory authorities, and financial institutions. He said that these organizations must relate to a regulated cryptocurrency ecosystem to have the option to expand their potential.
The company noted that financial institutions were a growing vertical in its customer portfolio and that governments issued 50% of the requests for an investigation.
By Alexander Salazar