Key Takeaways:
Norwegian police arrested 28 men across 7 countries after developing a method to trace Monero transactions on the dark web, the National Criminal Investigation Service said Wednesday.
"We have worked closely with 6 countries to coordinate the arrests of the identified users who paid with cryptocurrency to gain access to the forums," Terje Nedrebø Michelsen, police prosecutor at Kripos, said in a statement.
The men, aged 22 to 54, were arrested in Norway, Sweden, Switzerland, Canada, the Czech Republic, Poland and Germany. The operation, carried out in early June, led to the seizure of more than 460 items including electronic devices, crypto wallets, drugs and doping substances, Europol said. Three children were safeguarded as a result.
The ability to trace Monero transactions challenges the core premise of privacy coins, which have long marketed themselves as untraceable alternatives to Bitcoin. If law enforcement can effectively trace Monero, the anonymity premium that has supported its valuation may erode, potentially triggering sell-offs across the privacy coin sector and inviting increased regulatory scrutiny from agencies including the SEC and FinCEN.
How the tracing method works
Kripos said it had developed the tracing method in 2025, marking a milestone in the practical ability of authorities to follow cryptocurrency payments on privacy-focused networks. Unlike Bitcoin, which operates on a transparent public ledger, Monero uses ring signatures and stealth addresses to obscure transaction details. If those features can be reliably traced, the token's primary use case — private, untraceable payments — is undermined.
Europol added that one of those arrested "was extensively using artificial intelligence in order to generate illegal material," while some victims were part of another suspect's immediate family. More arrests are expected, potentially in additional countries, Kripos said, noting that there were "many suspects."
Broader implications for privacy coins
The development introduces a new risk factor for privacy coin holders. Other tokens including Zcash and Dash may face similar scrutiny as regulators and law enforcement agencies expand their tracing capabilities. Exchanges may face pressure to delist privacy tokens if tracing technology makes compliance with anti-money laundering rules more feasible. Major platforms including Binance and Kraken have previously delisted Monero in certain jurisdictions, and this development could accelerate similar actions elsewhere.
This article is for informational purposes only and does not constitute investment advice.
