Anamorphic Monero Transactions: the Threat of Bypassing Anti-Money Laundering Laws

Adrian Cinal; Przemysław Kubiak; Mirosław Kutyłowski; Gabriel Wechta

Paper 2025/1961

Anamorphic Monero Transactions: the Threat of Bypassing Anti-Money Laundering Laws

Adrian Cinal

, NASK National Research Institute

Przemysław Kubiak

, NASK National Research Institute

Mirosław Kutyłowski

, NASK National Research Institute

Gabriel Wechta

, NASK National Research Institute

Abstract

In this paper, we analyze the clash between privacy-oriented cryptocurrencies and emerging legal frameworks for combating financial crime, focusing in particular on the recent European Union regulations. We analyze Monero, a leading "privacy coin" and a major point of concern for law enforcement, and study the scope of due diligence that must be exercised under the new law with regard to Monero trading platforms and how it translates to the technical capabilities of the Monero protocol. We both recognize flaws in the legislation and identify technical pitfalls threatening either the effective compliance of, say, Monero exchanges or the anonymity endeavour of Monero itself. Of independent interest is that we turn to anamorphic cryptography (marking one of the first practical applications of the concept) and leverage it to build a hidden transaction layer embedded in the Monero blockchain that obfuscates illegal money flow and circumvents transaction-level attempts at enforcing the EU law.

Metadata

Available format(s): PDF
Category: Applications
Publication info: Published elsewhere. Minor revision. Computer Security – ESORICS 2025
DOI: 10.1007/978-3-032-07891-9_6
Keywords: Privacy coins Anamorphic cryptography Money laundering
Contact author(s): adrian cinal @ nask pl
przemyslaw kubiak @ nask pl
miroslaw kutylowski @ nask pl
gabriel wechta @ nask pl
History: 2026-03-30: last of 5 revisions; 2025-10-20: received; See all versions
Short URL: https://ia.cr/2025/1961
License: CC BY

BibTeX

@misc{cryptoeprint:2025/1961,
      author = {Adrian Cinal and Przemysław Kubiak and Mirosław Kutyłowski and Gabriel Wechta},
      title = {Anamorphic Monero Transactions: the Threat of Bypassing Anti-Money Laundering Laws},
      howpublished = {Cryptology {ePrint} Archive, Paper 2025/1961},
      year = {2025},
      doi = {10.1007/978-3-032-07891-9_6},
      url = {https://eprint.iacr.org/2025/1961}
}