Topic: SEC offered a 625K bounty for a tool to track LN and Monero (Read 372 times)

Thanks for the update, I'm not surprised that Chainalysis collared the $625k bounty. They've been making a lot of noise lately and they have been in the forefront on developing softwares for anti money laudering. I'm not familiar with Integra though, but it seems that they have the reputation behind their name. As for the 8 months delivery, they don't have a choice, maybe it could be a rush tools, or maybe they've already build a working model and now they can deploy it with data and see if it working as designed.

I agree that although currently there are no tools available for tracking these  what the government is trying to do is to prevent money laundering and dark web activities using these privacy coins. Dark web and money laundering are serious threats to world economy and it must be wiped out not just in fiat but also in any digital economy. As for people who advocate for privacy maybe there is a better way to deal with this .

 I am all ears to listen to any ussgestions.

Ok it seems that it was awarded to two companies.


https://beta.sam.gov/opp/5ab94eae1a8d422e88945b64181c6018/view

So let's see how it goes, https://www.integrafec.com/ bolstered itself as "forensic data analytics" company that helps a lot of government agencies already. We are all familiar with Chainalysis already. They even said that they have broken Zcash or Dash or at least track 99% of all transactions. And with the award, everyone will be waiting for the supposedly tools that will help out IRS or SEC.

Can they deliver it within 8 months is the big question here.

I cannot assume the unassumable hehehe.

I reckon anyone who has been in the cryptospace for long enough know that Monero is the only legitimate anonymous coin. I do not know about Veil or Deep Onion, however, most of the other anonymous coins' privacy and anonymity claims are weak.

Also comedy news hehehehe.


Per its Wednesday additions to its list of sanctioned individuals, the United States Treasury Department is targeting Monero (XMR) addresses.

Russian nationals Dmitriy Karasavidi and Danil Potekhin have become the newest names on the specially designated nationals list. According to the Treasury’s announcement on the subject, the two engineered an elaborate phishing campaign targeting U.S. citizens in 2017 and 2018.

Both parties had a number of cryptocurrency addresses including Bitcoin (BTC) and Ether (ETH), as well as Zcash (ZEC) and Litecoin (LTC). Surprisingly, Karasavidi’s information includes a Monero address: 5be5543ff73456ab9f2d207887e2af87322c651ea1a873c5b25b7ffae456c320.

Given Monero's famous built-in privacy features, this is a huge step for sanctions. Unfortunately for the Treasury, that XMR "address" is not an address at all, but rather a payment ID.

Source https://cointelegraph.com/news/new-us-treasury-sanctions-on-russian-hackers-hit-monero-address

IBM has been pretty aggressive about quantum computing. They have a lot of introduction about it on their website. They probably dont want to go lose the next processor battle like the transition from mainframes to PCs and are hence active in marketing quantum computing. We will have to see the exact link about what IBM said on breaking wallet in 2.5 days. They probably mean that IF theh can use QC to break SHA-256, they could break the wallet.

This bounty from IRS is interesting regarding LN. Aren't LN transactions connected to the on-chain funding/ closing transaction??  Alsk, if IRS wants to trace LN, it means they expect a lot of use in coming times which is well, good news for bitcoin and us.

Even if someone is able to do that (tracing), SEC/FBI won't get anything in return. The vast majority of the transactions in dark market still uses either BTC or ETH. And exchange liquidity with XMR is so low, that most of the trade is occurring outside the exchanges. Let's assume that SEC manages to trace a few XMR transactions. The users are then going to move to another anonymous coin, such as Veil or Deep Onion. I would advise the SEC to spend that money on something which is more productive.

According to your wise analysis, on what percentage of possibility will this bounty, paid for by the American tax payers, create a successful tool to trace transactions in Monero? Is it high?

And monitor everybody's movements. This is a desperate attempt for the SEC to catch up with cryptocurrency. They are now admittedly several steps behind. They need to up the ante and now they are into offering bounty to anyone who would play Judas. This bounty thing makes everything in Monero and LN look like a criminal or syndicate thing.

They just can't let the people live in private.

it is kind of funny to watch this never ending battle between the government wanting to constantly invade regular people's privacy and the people wanting to keep their privacy and keep the government out of it.
of course the funny part is not this battle itself, it is all the real criminals that keep doing whatever the hell they want while the government is busy snooping in the lives of regular people with no criminal intent.

good for all these crappy blockchain analysis companies that are going to take SEC money easily though.

An interesting offer from the SEC, I'm sure there will be bounty hunters who are interested in making a tool to track LN and Monero.
Although it is not easy to make a tool like that in my opinion, but it is possible to be able to make a tool like that.This is one of
the big breakthroughs that the SEC has made in my opinion, they are getting serious about dealing with the scammers that occur
in the crypto world. It would be good if the tool was successfully created in the end, because it will reduces the number of scammers
currently circulating.

Sometime in the future, yes. It will certainly be harder for bitcoin with the type of development preferring on the more moderate side, I reckon. Monero developers do hard forks every 6 months since the beginning.

The IRS should not scare the bitcoiners in the richlist. They might hide in Monero hehehe.

https://localmonero.co/blocks/richlist

With that lots of bounty, Im sure somebody will take that offer but mostly it should be a team work because doing such thing alone cannot be done because the job is more complex for a one person job. They really put some effort on this one, maybe they are going for something big this time. It should be easy for someone who was involved on those project because they might know something to make that tool to work.

Given the amount though, I have second thoughts about it, seems that this is just small compare to the crypto that there are going to seize, intercept from criminals or from tax evasions. So it's nothing, budget wise as well as we all know that they got millions and millions of budget every year. So it's a win win situation for them. So let's see how it goes, specially breaking down the Monero privacy protocol.

For now, sure. But let's not completely underestimate what kind of innovation the developers can do to help Bitcoin's privacy sometime in the future.

I reckon the privacy aspect of bitcoin will be a cat and mouse game that always ends with the cat tracing the transactions.



In any case, who has solved Monero's privacy aspect?

It is not that surprising to see that the government is willing to spend huge amounts to crack these things and i have seen articles and threads in this forum about some company planning to release tools that would track monero and other similar privacy related coins and if those claims are true then it is possible these big money can make changes.

Probably, I read the some articles and try to spin to look like this is a grant from SEC, Lol. And with that huge amount, there could be advocates that can change tune and accept that offer. Our privacy has already been compromised if you have accounts in a KYC mandated exchanges, anyways.

@NotATether - https://newsroom.ibm.com/2020-08-20-IBM-Delivers-Its-Highest-Quantum-Volume-to-Date-Expanding-the-Computational-Power-of-its-IBM-Cloud-Accessible-Quantum-Computers

IBM breaking open wallet files is new to me. I thought they were just another cloud computing company with a lot of customers. I know for one thing that IBM only ventures in low-risk professions, and brute forcing passwords doesn't exactly sound like a comfy profit cushion to me. Also weird is them getting involved in this black-hat activity. Surely, the government must've wanted to seize the wallet file and contract private companies for the task if IBM was poking its head in there.

Everyone's talking out of their ass. SEC, IRS, Interpol all have contracts with Chainalysis or similar, and their own ex-staff said they even had problems tracing CoinJoin, never mind privacy coins! Gotta admire their overselling though, seems to have worked!

There was also talk about that 6900 BTC wallet being passed around hacker to hacker, with no one being able to crack the wallet.dat for over two years, and IBM claiming they'd only need 2.5 days if they tried (but obviously talking out of their ass even with quantum computing).

The other day there was a article where they said these privacy coins like Monero can be traced and now they are offering money to whomever can provide a tool that can be used to trace these transactions. LoLz!

They must really be desperate to catch some people, if they are willing to put up money for this kind of tool. They will surely hit the jackpot, if someone can do this... because they can them prosecute a bunch of criminals in one go.... 

Looks like govs really dont like monero. Another one proof that this coin is really private

Correct, that is still a huge money to begin with and every one will cave in.

And as far as I know, There's still a lot of question of Cyphertrace claim regarding Monero. There tools still depend on whether some Monero users uses exchanges specially US based. And another thing, they didn't release it publicly.

Given enough money in exchange, I can almost guarantee that probably even the biggest bitcoin and privacy advocate could easily give in to the offer. The privacy aspect of Bitcoin and cryptocurrencies in general will be a cat and mouse game.

Agreed, a beginner who uses Monero will be more anonymous than expert who uses bitcoin and coinjoin. The results of the bounty will only become free marketing for Monero hehehe.

I reckon the Ciphertrace claims were debunked by a Monero Research Lab developer already.

Darknet markets still use Bitcoin a lot, despite Monero being much better in terms of privacy. This is likely because Bitcoin is much easier to obtain and more liquid, so I doubt that SEC will find this tool useless at any point, providing it would be able to work. And 625k is probably not a big money for SEC, so even if this tool would only be highly used for a few years, it's probably still worth it for them.

But I doubt they'll be able to effectively track LN payments, you'd need to have a good amount of spy nodes that route huge amounts of transactions, and still it would only be probabilistic.

If it's to be an eternal game of cat and mouse then surely dedicated privacy coins have no future. Why would you bother if they're cracked repeatedly and people skip to the next one?

A prominent one needs to fall before that becomes a likely scenario.

At some point all existing coins will become traceable but there will be new untraceable coins to fill the gap.

If you went back a few decades to the security people had on their computers in the 90s you'd be able to break it in minutes.

I remember when people thought protecting your computer with bios and windows passwords was good

Many sites had bugs where you could see the password in the code if someone forgot to log out. Technology evolves so fast.

The SEC will spend a year getting it ready and another year making their people learn how to trace transactions. By that time there will be a new new privacy coins.

I don't think they will disclose all the truths behind this project. Who knows, they already have one, like the CipherTrace, they are not just saying what's their cooking? More than likely, they have been working on this project for years already, and now that they are seeing light at the end of the tunnel, the reason why they disclose this project, so as not to shock the community, if in case they will utilize it to other fact-finding activities.

No doubt that it would really be used in other purposes as well not just on targeting only with criminal or illegal transactions but also in to those tax evaders as well.
This had been always an issue since those tracking industry had popped out. They are really that serious on tracking up everything LN and MONERO? Its not impossible
but as said above it would be challenge when we do talk about XMR.
Indeed the question is, if they do able to create one, would they let everyone know? i guess not.

Tracking transactions withing LN won't break it up more than it has done with BTC.


And if this tool is created "criminals" will simply switch to something else, just as they went from BTC to monero, and the SEC will be left with a useless toy, so they will have to give it another purpose, like seeing who hasn't paid its taxes for the 10 satoshi earned in a faucet in 2007.
The only good thing I see in this is that they don't currently have a tool to track all this, although it could also be a trick to give a false sentiment of security to the ones dealing on dark markets, but, let's not all nutty here.

As for CipherTrace, claims need proof to be taken seriously. Have they ever presented something?

1. At the same time you have to offer the person who is going to do that good amount of money 💰 at the same time that person might be tracked down all his life by the government itself.

Government never ever respects the privacy thus I do believe that one should get involved with them at their own risk.

If one person knows how to break it then I do believe it would create uncertainties in the future. Plus could affect everything negatively. 

I don't think that they were successful in doing that otherwise it would be all over the internet and even the website would take down the notice.


Rightly said , BUT unfortunately things are not always this way , most of the times the people who are just trying to respect their privacy and doing nothing illegal are facing the consequences since government if they did get their hands on this won't stop tracking everyone down.

I do believe even if it's for the security for them to track down each and everyone out there they shouldn't pry too much into this , but I do believe this time they might have gotten a lot of complains therefore they have to.

_*_

As for me I do believe that privacy should be treated respectfully and thus people should only be bothered if there is any FIR or Complaint regarding them . This can be disastrous.

Definitely, there will be developers that will be interested with that huge amount in the table. But if you are a real bitcoiner, you shouldn't help the government break LN.  .

As far as Monero goes, CipherTrace say's that they have broken it, but there are people in the Monero community say's otherwise: https://cryptobriefing.com/ciphertraces-monero-tracking-tool-isnt-effective-researcher-says/

Tracing LN is not impossible but the real challenge is with Monero. That's why its usage is growing in darknet and monero is very different to track and trace. However, if I remebr correctly, Ciphertrace claimed to have developed a tool that can trace Monero.

Interestingly, this toll will be first used by US department of Homeland security as they are concerned on growing criminal usage of Monero. So I hope SEC will make use of such tools to effectively discourage and trace the crypto criminals.

Here are the official documents:

https://beta.sam.gov/opp/3b7875d5236b47f6a77f64c19251af60/view?index=opp.

There are two links in there, but it's /Pilot+IRS+Crypto+RFP+FINAL.pdf that contains everything.



Page 5 says:



Phase 1 for $500k 8 months duration
Phase 2 for $125k for 120 days duration
Total: $625k

What do you think of this? Will some ethical hackers stepping and developed a tool if possible?