Cybercriminals, who believed that cryptocurrency transactions would save them from scrutiny and legal crackdown, got a rude shock when the US’ Federal Bureau of Investigation (FBI) successfully recovered $2.3 million in bitcoin ransom paid by Colonial Pipeline.
Bitcoin seizures are rare, but authorities have stepped up their expertise in tracking the flow of digital money as ransomware has become a growing national security threat.
Bitcoin’s public ledger, which records all token transactions in its history, is visible to everyone and makes it easier to track the transactions and transactors. Therefore, cryptocurrencies like dash, zcash, and monero that have additional built-in anonymity, are now attracting more cybercriminals.
In fact, monero has now become the most preferred mode of cryptocurrency for ransomware criminals, according to a CNBC report
What is monero?
Monero was released in 2014 by a consortium of developers, many of whom chose to remain anonymous. They claimed that “privacy and anonymity” are the digital currency’s most important aspects. Monero was tagged as a “privacy-centric cryptocurrency project that aims to obfuscate the linkability of transactions across source, quantity, and destination”.
Riccardo Spagni was the lead maintainer of monero until he stepped down in late 2019.
Monero operates on its own blockchain, which hides virtually all transaction details, including the identity of the sender and recipient, as well as the transaction amount. This facilitates cybercriminals in reaching greater levels of freedom through different mechanisms that track cypto transactions.
“On the bitcoin blockchain, you can see what wallet address transacted, how many bitcoins, where it came from, where it’s going. With monero, the blockchain obfuscates the wallet address, the amount of the transactions, who the counter-party was, which is pretty much exactly what the bad actors want,” Fred Thiel, ex-chairman of Ultimaco, a Europe based cryptocurrency company, told CNBC.
In 2021, Monero climbed the charts by over 250 percent in just four months.
Monero also received an anonymous donation of $500,000 last week. A report explaining what would be done with this donation is expected this month.
We’re delighted to share that our General Fund has received a donation of 1711 XMR (approximately $500k)!
Interested in contributing to improve Monero? Start here ⬇️https://t.co/p0MyNsOzVH https://t.co/PYJ8eEMqli
— Monero || #xmr (@monero) June 6, 2021
What doesn’t work for monero?
Monero faces a series of hurdles in its path to becoming a mainstream cryptocurrency. Many regulated exchanges have chosen not to list it due to regulatory concerns, thus making it less liquid than other cryptocurrencies. This translates to cybercriminals facing difficulty in getting directly paid in this currency.
The digital currency could also be more vulnerable to regulation at its on-and-off-ramps, which is the bridge between fiat cash and crypto tokens, according to the CNBC report. Thiel opines that Monero might face a shut-down in the near future. Any exchange that lists it could also risk losing its licence.