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Monero’s Privacy Features Challenged as Finnish Investigation Reveals Crypto Trail

Finland’s National Bureau of Investigation (NBI) recently made a breakthrough in their investigation into Julius Aleksanteri Kivimäki’s criminal trial. Kivimäki stands accused of hacking a private mental health firm’s database and demanding ransom payments in cryptocurrencies, a case that has garnered significant attention.

Local reports indicate that prosecutors unveiled fresh evidence on January 22nd, revealing a crypto trail leading directly to Kivimäki’s bank account.

The hacker’s alleged extortion scheme unfolded in October 2022 when he demanded 40 Bitcoins in exchange for withholding the release of sensitive records pertaining to over 33,000 patients from the psychotherapy service provider Vastaamo.

When the ransom was not paid, Kivimäki purportedly escalated the situation by targeting individual patients.

Finnish law enforcement authorities assert that the hacker received payments in Bitcoin, subsequently funneling the funds through an exchange that lacked compliance with Know Your Customer (KYC) guidelines.

From there, Kivimäki reportedly converted the Bitcoin into Monero and transferred the proceeds to a dedicated Monero wallet.

Following these initial transactions, reports suggest that the funds were later sent to the cryptocurrency exchange Binance, where they were once again exchanged for Bitcoin and subsequently dispersed across different wallets.

It is crucial to note that the local authorities have maintained a veil of confidentiality regarding further details of their on-chain analysis.

READ MORE: Binance and SEC Legal Battle Intensifies Over Evidence and Witness Disputes

Monero, a cryptocurrency known for its robust privacy features, played a central role in this narrative.

The official Monero webpage touts its untraceability, thanks to technologies such as Ring Confidential Transactions (RingCT), ring signatures, and stealth addresses.

RingCT mingles users’ transactions, obfuscating the true source of funds, while ring signatures obscure the sender’s identity by presenting them as part of a group of potential senders.

Additionally, Monero’s stealth addresses enable the creation of one-time addresses for each transaction, making it exceedingly challenging to link multiple transactions to the same recipient.

This incident is not the first time that privacy-focused cryptocurrencies like Monero have come under scrutiny from regulators.

French authorities, led by Eric Woerth, the head of the Finance Committee in the French National Assembly, once proposed a ban on anonymous cryptocurrencies like Monero, citing concerns about their ability to provide complete anonymity and bypass identification procedures.

In a similar vein, United States authorities took a keen interest in Monero in 2020.

The Internal Revenue Service even offered a substantial bounty of up to $625,000 for anyone who could break the purportedly untraceable privacy coins.

Previous research also suggested that blockchain analysis could potentially trace back transactions involving privacy coins, including those that occurred before 2017.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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