The price of Monero (XMR) surged 50% on April 28th, after renowned on-chain investigator ZachXBT uncovered a suspicious Bitcoin money laundering case worth approximately $330.7 million.
According to ZachXBT, a large transaction, equivalent to 3,520 BTC, was made from the wallet of a potential victim to a new address (bc1qcry…vz55g). Shortly thereafter, the entire amount of Bitcoin was dispersed through at least six instant exchanges and converted into Monero (XMR) – the cryptocurrency known for its high privacy security.
This development is believed to be the direct cause of Monero's price spike. Data from CoinMarketCap shows that XMR reached a local peak of $339, a 50% increase from the previous session. Although the price adjusted slightly afterward, at the time of writing, XMR still recorded a 25% increase in 24 hours, trading around $289.
In response to suspicions that the Lazarus Group hackers from North Korea were behind the incident, ZachXBT dismissed it, stating that it is highly likely this is the action of independent hacker groups.
The incident once again raises the debate about the role of privacy cryptocurrencies in the digital asset ecosystem. However, according to a recent analysis by blockchain data company Chainalysis, most criminal activities in the cryptocurrency sector still center around popular assets like Bitcoin, Ethereum, and stablecoins, rather than privacy coins.
"Although there are concerns that criminals will switch to using privacy coins to increase anonymity, in reality, most illegal transactions still occur on high liquidity assets," said a Chainalysis representative. These popular assets are not only easy to trade across borders and enable instant payments, but they also provide superior liquidity compared to privacy coins like Monero.
Chainalysis also pointed out that low liquidity and delisting on many major exchanges due to pressure from regulatory compliance are limiting the use of Monero in money laundering transactions. "Cryptocurrencies are only useful when they can be exchanged for goods, services, or fiat money, which privacy coins face more challenges with," the report analyzes.
Additionally, Chainalysis emphasizes that the inherent transparency of blockchain, even for some privacy coins, still allows law enforcement agencies to trace transactions. Notably, a leaked video in 2024, purportedly from Chainalysis, demonstrated the ability to trace Monero through 'rogue nodes' embedded in the Monero network.
Monero is used for payments in Switzerland. Source: Schmidt
In another development, while Monero is embroiled in controversies related to money laundering, it is gradually expanding its presence in the legal payment sector. Recently, two stores in the Spar supermarket chain in Switzerland began accepting payments in XMR, thanks to cooperation with DFX Swiss and OpenCryptoPay. A user confirmed a successful purchase using Monero at the Spar store in Kreuzlingen on April 25th. Previously, Spar had also implemented Bitcoin payments through the Lightning Network at points of sale in the city of Zug.
