The privacy-focused digital currency monero has captured the attention of the Federal Bureau of Investigation (FBI), which has expressed concerns over its use among criminals.
Joseph Battaglia, a special agent working at the FBI’s Cyber Division in New York City, said during an event last week that widespread use of the increasingly popular cryptocurrency might impact the way the agency conducts investigations.
Addressing a group of about 150 law students at New York's Fordham University, he said:
Launched in April 2014, monero (XMR) is a cryptocurrency with enhanced privacy features. A fork of the Bytecoin codebase, monero leverages identity-obscuring ring signatures to make it unclear which funds have been sent by whom and to whom.
The cryptocurrency saw its price soar in 2016, climbing from about $0.50 at the beginning of the year to about $12, a 2,760% increase.
Since 2013, the agency has seen "enormous growth" in the number of cases involving digital currency payments, according to Battaglia. Of those, 75% involved bitcoin, he said, though he mentioned litecoin and monero as other cryptocurrencies the agency has encountered thus far.
The FBI Cyber Division looks into a diverse range of online criminal activity.
Battaglia’s statements came after his "high-level" account of a typical cryptocurrency investigation given at the event, which one of a series of blockchain workshops co-hosted with IBM.
Other panelists included Brigid McDermott, vice president of blockchain business development at IBM; Dan Ramsden, a Fordham Business School adjunct professor; and Gregory Xethalis, a partner at law firm Kaye Scholer.
Following the event, the special agent said he couldn't provide additional details specifically pertaining to the FBI’s investigative techniques surrounding monero when asked by CoinDesk.
During the panel, however, Battaglia described the FBI as "a reactionary organization", adding that, instead of trying to predict the direction that cryptocurrency use might go, the agency has adopted a wait-and-see approach.
Photo credit: Bruce Gilbert / Fordham University
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.