protos.com
Yesterday, Cointelegraph claimed to have discovered ‘breaking’ research regarding Monero’s privacy. The crypto publication suggested that a now-deleted video demonstrated Chainalysis’ methods for tracing Monero (XMR) transactions to individual users. Unfortunately, its journalists failed to mention that the video itself was popular among Monero advocates, providing Monero users with an understanding of how to bypass Chainalysis’ techniques.
Chainalysis tools combine ‘malicious’ nodes, ‘decoy’ inputs, and IP logs from popular wallets to deanonymize XMR transactions.
Quickly, the crypto privacy community took note. They commented underneath Cointelegraph’s post, asking why they characterized these techniques as ‘breaking news.’
A news video with no news
The video explained how Chainalysis – a US government contractor that runs a massive data harvesting operation across major blockchains, exchanges, and crypto services – collects data from Monero nodes. By piecing together data like repeat transactions, IP location, and other data points, Chainalysis allows law enforcement to trace criminal activity.
However, that Chainalysis is running Monero nodes and harvesting IP addresses is not newsworthy. This has been common knowledge in the Monero community for years.
Prominent Monero user Csilla Brimer summarized the non-event to Decrypt, “Long story short, this strategy doesn’t compromise on-chain privacy for users who avoid these fake nodes or use Tor.”
Rather than releasing the video to break any news, Monero users were simply discussing privacy-preserving tactics given the obvious presence of Chainalysis in their ecosystem.
Monero users talked about running their own node – to avoid reliance on Chainalysis’ nodes. They recommended IP-obfuscating services like Dandelion. They discussed privacy-preserving exchanges with less government cooperation to avoid exchanges like MorphToken that collaborate with Chainalysis.
In short, the video did not reveal any technique for deanonymizing Monero transactions that was news to the Monero community. Instead, it provided a reminder to users to take advantage of intelligent ways to protect one’s privacy given the presence of Chainalysis’ data-harvesting operations.