A division of the Russian intelligence service reportedly declares it has uncovered a way to trace crypto transactions – and claims it can “partially” de-anonymize activities made using bitcoin (BTC), ethereum (ETH), Omni (OMNI), and dash (DASH), as well as the most common privacy coin monero (XMR).
As reported by RBC, the cases were created by the Federal Financial Monitoring Service (known as Rosfinmonitoring). This government bureau tries to fight money laundering and terrorism funding in the nation.
The claims, said the media source, were made in a Rosfinmonitoring letter sent to the Ministry of Digital Development, Communications and Mass Media. RBC said it had acquired a copy of this letter.
Rosfinmonitoring said it had created a model for a software platform that makes use of AI technology. The design, called “Transparent Blockchain,” and the media outlet said that the letter affirms that the Ministry of Internal Affairs has now started looking into the new platform’s potential usage.
The agency supposedly said that it utilizes technology that allows AI to classify transactions, matching them with standard sets of crypto transaction profiles.
And the AI-powered system’s scope may not be limited to Russia. RBC said the letter states that “several overseas countries have also shown interest in the system.”
The media outlet stated that the platform has associations with offerings developed by the likes of America’s Chainalysis.
The platform will be able to do the following, said RBC:
- Control and analyze the movement of digital financial assets
- Distinguish service providers
- Carry out investigations into suspected cases of the illegal circulation of crypto assets
- Partly remove the anonymity of the participants in transactions using the Bitcoin, Ethereum, Omni, Dash and Monero networks
- Handle searches of the net to find posts and images with fundraising details that may be linked to crypto-powered terrorist financing
- View information related to crypto-powered money laundering and terrorist financing
Nevertheless, to get off the ground, the project will need some $10.4 million worth of funding over the next three years, the agency allegedly said.
RBC announced the government has been cagey about confirming the authenticity and contents of the letter. The Ministry of Digital Development, Communications and Mass Media said it confirmed the receipt of a letter from Rosfinmonitoring with AI-related proposals but refused to comment any further on the letter’s content.
Rosfinmonitoring and the Ministry of Internal Affairs did not respond to requests for comment.
The media outlet announced that two of its crypto industry sources authenticated the Transparent Blockchain project’s existence.
The agency began working on crypto monitoring solutions since 2018.