BlueLeaks: A Document Shows which Cryptocurrency Worries the FBI

The BlueLeaks recently exposed 270 gigabytes of data from US policing. An FBI document is about darknet markets and their methods of laundering money. The document confirms that Monero is becoming increasingly popular in these circles.

The so-called ”¬†BlueLeaks¬†” originate from a web agency that has stored sensitive data for several police departments in the United States.¬†The data leaked by the “Distributed Denial of Secrets” group comprises a total of 270 gigabytes and covers a period from 1996 to 2020.

The police fear that the data will be useful for other nation-states as well as hackers and cybercriminals to attack vulnerabilities. Police also complain that the documents contain names, email addresses, phone numbers, photos, videos, and other private information.

As¬†Decrypt reports¬†, there is at least one¬†document¬†on¬†cryptocurrencies¬†among the data¬†.¬†It’s a short FBI report that tells how investigators track money laundering on the Darknet when they switch bitcoins to Monero.¬†The document is from 2020 and therefore relatively up to date.

The FBI investigators have followed the traces of various participants in various darknet markets, such as the drug markets Apollon and Cryptonia.¬†Traders who have received bitcoins have probably washed them by exchanging them for Monero at an instant changer such as MorphToken from Panama.¬†It is believed that buyers do the same to shop safely in the marketplaces.¬†This severely hampered the investigators’ ability to determine the recipients of the coins.

The FBI obtained this knowledge from a mix of measures, including the analysis of the blockchain using special software, information from the changer MorphToken, knowledge from darknet sites and forums, and other investigations.

The very short document impressively shows the challenges that privacy coins like Monero pose to law enforcement.¬†The FBI’s fear in 2018 of an increasing spread of privacy coins among criminals is borne out.¬†Switching in coins like Monero through exchanges like MorphToken that do not identify customers is becoming a serious problem that “severely limits the ability of law enforcement to use existing technology to track cryptocurrencies involved in illegal activities.”

The document also demonstrates that Monero has now become the gold standard for private transfers in the Darknet. Thanks to ring signatures and confidential transactions, Monero actually seems to have reached a level of anonymity that is practically impossible for police analysts to crack. Cybercriminals are increasingly recognizing this. At least that is what the data from MorphToken suggest. The exchange offers various currency pairs, but all transactions that the FBI has observed exchanged Bitcoin for Monero and vice versa.

This could mean that the competition of privacy coins for the Darknet could be decided – even if this is no more positive news for owners of Monero than for those who think that the world needs an anonymous cryptocurrency for everyday life. Because the more Monero is associated with crime – in addition to drug trafficking,¬†kidnapping,¬†ransomware,¬†malware¬†and¬†botnets¬†– the harder it will be to get honest citizens to it.¬†Which would be pretty sad, since a free cryptocurrency like Monero democratizes privacy by granting it to those who can’t afford Panama accounts or have the technical knowledge to disguise bitcoins.