Finnish authorities reportedly track Monero transactions in high-profile hacking case

Finnish authorities have reportedly traced transactions involving Monero (XMR), a privacy-focused digital currency, in connection with a high-profile criminal case. The suspect, Julius Aleksanteri Kivimäki, is accused of hacking a private mental health firm’s database and using cryptocurrencies for ransom demands.

Tracing the untraceable: Monero’s role in cybercrime

Monero, known for its robust privacy features, has been at the forefront of a complex investigation involving the alleged hacking of Vastaamo, a Finnish psychotherapy service provider. Reports indicate that in October 2022, the hacker demanded a ransom of 40 Bitcoin, approximately 450,000 euros at the time, threatening to release records of over 33,000 patients. When the demands were not met, the hacker purportedly targeted individual patients.

The Finnish National Bureau of Investigation has revealed that the criminal received payments in Bitcoin, which were then sent to a non-compliant exchange, swapped for Monero, and transferred to a specific Monero wallet. This process was repeated, converting the funds back to Bitcoin and moving them across various wallets. The intricate use of Monero in this case underscores the challenges authorities face in tracking transactions involving privacy-centric cryptocurrencies.

Monero’s privacy features and regulatory scrutiny

Monero’s official website boasts of its “untraceable” nature, a claim backed by privacy-enhancing technologies like Ring Confidential Transactions (RingCT), ring signatures, and stealth addresses. These features effectively conceal transaction details, making it challenging to trace the movement of funds. RingCT, for instance, mixes transactions to obscure the source of funds, while ring signatures hide the sender’s identity among a group of possible senders. Stealth addresses further complicate tracking by generating unique addresses for each transaction.

This level of anonymity has not only attracted users seeking privacy but also regulatory attention. In 2019, Eric Woerth, head of the French National Assembly’s Finance Committee, proposed banning anonymous cryptocurrencies, including Monero, citing their potential for bypassing identification procedures. Similarly, in 2020, the U.S. Internal Revenue Service offered a substantial bounty for breaking the privacy of coins like Monero, reflecting growing concerns over their use in illicit activities.