The Finnish law enforcement agency, the National Bureau of Investigation (NBI), recently claimed to have made a breakthrough in tracing the privacy coin Monero. However, supporters of the cryptocurrency reject these assertions and maintain that Monero remains untraceable. The NBI produced a report identifying Julius Aleksanteri Kivimäki as the hacker behind the Vastaamo data breach, providing details on how he used Monero to launder money. Despite this, critics argue that the agency has not provided verifiable evidence of its tracing capabilities. While the investigation revealed the hacker’s attempts to obscure funds by switching between cryptocurrencies and using intermediaries, Monero proponents remain skeptical about the agency’s claims.
Identification of Hacker Behind Vastaamo Data Breach Revealed
The Finnish law enforcement agency, the National Bureau of Investigation (NBI), recently claimed that it has found a way of identifying individuals who use the privacy coin Monero (XMR) to launder money. To back this claim, the agency produced a report explaining why it concluded that Julius Aleksanteri Kivimäki was the criminal behind the Vastaamo breach.
Finnish authorities have long believed Kivimäki to be the cybercriminal behind the hacking of the private psychotherapy service provider Vastaamo’s patient database in October 2020. After gaining access to patients’ records, Kivimäki demanded 40 bitcoins (BTC) in exchange for not publishing these records. He similarly threatened Vastaamo’s 30,000 patients.
However, almost two years later, Kivimäki was identified as a hacker by the NBI and was charged in absentia for crimes ranging from aggravated data breach and attempted extortion to breach of confidentiality and falsification of evidence. An Interpol arrest warrant was subsequently issued, and this ultimately led to Kivimäki’s arrest in early February 2023. He was later extradited to Finland.
As noted in a local report, the NBI has not produced verifiable proof to support Monero tracing breakthrough claims. The investigative report, which reveals how this feat was achieved, is heavily redacted. The head of the investigation, Marko Leposen, defended NBI’s decision not to divulge details of how it traced XMR transactions.
Despite providing scant details on how the NBI managed to identify Kivimäki, the agency’s document reportedly showed how the hacker attempted to obscure the movement of the funds by switching from BTC to XMR and hopping between crypto exchanges. It also revealed how Kivimäki used mules to move the funds.
NBI’s Monero Tracing Claims Dismissed
Meanwhile, some proponents of the privacy coin have dismissed the Finnish law enforcement agency’s assertions. According to them, no tracing of Monero transactions happened in this case.
For instance, on Reddit, one user suggested that the NBI’s only success was tracking “a certain person who used centralized exchanges and swapped monero for traceable cryptos. They noticed that the amounts were similar and deduced that it was the same monero.” As far as tracking XMR is concerned, the user insisted that this is still not possible.
Another user similarly suggested that the agency’s only breakthrough, in this case, was realizing that a “similar quantity was exchanged from bitcoin to monero, then was deposited into Binance.
Critics Claim NBI Lacks Verifiable Proof
The claims made by the National Bureau of Investigation (NBI) regarding their breakthrough in tracing Monero transactions have faced criticism from critics who argue that the agency has not provided sufficient verifiable proof. A report on the NBI’s Monero tracing methods has been heavily redacted, creating further doubts about the validity of their claims.
Without concrete evidence and transparency in their investigative process, some critics argue that the NBI’s claims should be dismissed. The lack of verifiable proof raises questions about the reliability and accuracy of the NBI’s findings, particularly in identifying the hacker behind the Vastaamo data breach.
Report on Monero Tracing Methods Heavily Redacted
The NBI’s report on their Monero tracing methods has been met with skepticism due to its heavy redactions. The redacted portions of the report have fueled speculation and doubts about the effectiveness and validity of the NBI’s tracing breakthrough claims.
The decision to heavily redact the report raises concerns about the transparency of the NBI’s investigation and their willingness to disclose crucial details about their tracing methods. Critics argue that without access to the full report and the redacted information, it is difficult to evaluate the accuracy and reliability of the NBI’s claims.
NBI Defends Decision Not to Disclose Tracing Details
Despite criticism and skepticism surrounding their tracing methods, the NBI has defended its decision not to disclose the details of how they traced Monero transactions. The head of the investigation, Marko Leposen, stated that divulging such information could compromise future investigations and hinder law enforcement efforts to combat cybercrime.
The NBI’s stance is grounded in the need to maintain operational security and prevent potential criminals from adapting and evading detection. By keeping their tracing methods confidential, the NBI believes they can continue to effectively investigate and prosecute cybercriminals using privacy coins like Monero.
Proponents Argue No Monero Tracing Occurred
Proponents of Monero, the privacy coin at the center of the NBI’s tracing claims, argue that no actual tracing of Monero transactions took place in the Vastaamo data breach case. They contend that the NBI’s success was limited to tracking a certain individual who used centralized exchanges and switched between cryptocurrencies, including Monero.
According to these proponents, the similarities in exchanged amounts and the use of centralized exchanges were the only factors that led the NBI to deduce the involvement of Monero. They maintain that true tracing of Monero transactions remains challenging, if not impossible, given the privacy features and security protocols of the cryptocurrency.
Claims of Tracking Centralized Exchange Use
One key aspect of the NBI’s investigation into the Vastaamo data breach involves the tracking of centralized exchange use. Critics argue that the NBI’s claims of successfully tracing Monero transactions are based on their ability to identify a certain individual who used centralized exchanges to swap Monero for traceable cryptocurrencies.
By monitoring the activity and transactions on centralized exchanges, the NBI purportedly discovered similarities in the amounts exchanged, leading them to suspect the involvement of Monero. However, proponents of Monero maintain that this does not constitute true tracing of Monero transactions and that the privacy and security features of the cryptocurrency remain intact.
User Indicates Similarity in Exchange Amounts
A user on Reddit pointed out the NBI’s reliance on similarities in exchanged amounts as a basis for their tracing claims. According to this user, the NBI noticed that a certain individual exchanged a similar quantity of Bitcoin for Monero and subsequently deposited the Monero into Binance, a popular cryptocurrency exchange.
While the NBI may have concluded that the similarity in exchanged amounts indicated the involvement of Monero, Monero proponents argue that this does not constitute definitive proof of tracing. They contend that the NBI’s claims rely on speculative connections and do not address the fundamental privacy features of Monero that make true tracing challenging.
Challenges to Tracing of Monero Transactions
Tracing Monero transactions has long been a challenge for law enforcement and regulatory agencies due to the privacy features embedded in the cryptocurrency. Monero utilizes ring signatures, stealth addresses, and confidential transactions to obfuscate the sender, recipient, and transaction amounts, making true tracing difficult.
The NBI’s claims of tracing Monero transactions have faced skepticism and pushback from proponents of privacy coins. They argue that the privacy features of Monero, combined with the use of decentralized exchanges and other privacy-enhancing tools, make it highly unlikely for authorities to effectively trace Monero transactions without compromising user privacy.
Continued Debate on the Privacy of Monero
The controversy surrounding the NBI’s claims regarding the tracing of Monero transactions highlights the ongoing debate on the privacy and traceability of cryptocurrencies. Privacy coin proponents argue that privacy features are essential for protecting individuals’ financial privacy and preventing surveillance.
However, authorities and regulatory agencies maintain that privacy coins like Monero can enable illicit activities, such as money laundering and funding criminal enterprises. They argue that there needs to be a balance between privacy and transparency to ensure legal compliance and prevent abuse of cryptocurrencies.
As the debate continues, it remains to be seen if law enforcement agencies will find effective methods to trace privacy coins like Monero without compromising user privacy or if privacy coins will continue to provide a secure and private financial alternative.
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