In a significant cybercrime case involving requests for ransom, the Finnish government tracked down Monero.
According to reports, Finnish police have been tracking the privacy-focused digital currency Monero (XMR) in connection with a high-profile criminal case. Julius Aleksanteri Kivimäki is wanted on charges of breaking into the database of a private mental health business and demanding ransom in cryptocurrency.
One of the most intricate investigations into the claimed hacking of Vastaamo, a Finnish psychotherapy service provider, has revolved around Monero and its strong privacy characteristics. Supposedly, the hacker threatened to reveal the information of more than 33,000 patients in exchange for 40 bitcoin, which was over 450,000 euros in October 2022. After the requests were not fulfilled, the hacker claimed to go after specific patients.
The offender received Bitcoin payments, transmitted them to an exchange that did not comply, switched them for Monero, and then sent them to a particular Monero wallet, according to the Finnish National Bureau of Investigation. This procedure was carried out many times, each time transferring the money to a different Bitcoin wallet. The complexity of this case’s Monero use highlights the difficulties authorities have when trying to trace transactions employing privacy-focused cryptocurrencies.
Privacy-enhancing mechanisms like Ring Confidential Transactions (RingCT), ring signatures, and stealth addresses support Monero’s “untraceable” nature, as boasted on its official website. Due to these qualities, it is difficult to track the transfer of money since transaction data is effectively hidden. To mask the origin of money, RingCT combines transactions, and ring signatures disambiguate the sender’s identity from a pool of potential senders. Since stealth addresses generate new addresses for every transaction, tracing becomes much more complicated.
Both consumers and regulators interested in privacy have been drawn to this degree of anonymity. In 2019, French National Assembly Finance Committee chairman Eric Woerth advocated for the prohibition of anonymous cryptocurrencies like Monero due to their ability to evade identification processes. Concerns over the use of cryptocurrencies like Monero in illegal operations led the United States Internal Revenue Service to offer a large reward for revealing their privacy in 2020.
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