Monero (XMR), the privacy-centric cryptocurrency that was first released in 2014, is now definitely on the FBI’s radar. In late 2016, darknet markets AlphaBay and Oasis Markets began to accept Monero for payments. At a recent seminar session attended by a journalist from CoinDesk, Special Agent Joseph Battaglia of the FBI’s Cyber Division in New York City, told 150 people at Fordham University that the FBI was monitoring Monero, and was concerned criminals would use Monero for nefarious purposes. Special Agent Battaglia gave a “high-level” account of how the FBI’s Cyber Division conducts cryptocurrency investigations, during the event. The event was hosted by Fordham University and co-hosted by IBM and was attended by law students at the university, as well as by New York City Police detectives and IRS agents.

“There are obviously going to be issues if some of the more difficult to work with cryptocurrencies become popular. Monero is one that comes to mind, where its not very obvious what the transaction path is or what the actual value of the transaction is except to the end users,” Special Agent Battaglia said at the seminar. During 2016, the price of Monero soared from around $0.50 (USD) to over $12 (USD). Monero provides more privacy than Bitcoin, using the CryptoNote protocol which is based on one-time ring signatures and stealth addresses. Monero transactions cannot be traced, and is designed to prevent the identity of the sender and receiver of the cryptocurrency.

During a panel at the event, which featured IBM’s Vice President of Blockchain Business Development, Special Agent Battaglia described the FBI as a “reactionary organization” and said that the FBI’s Cyber Division is taking a wait-and-see approach with Monero. “We’re going to look at what catches on, and what becomes mainstream, and then we’re going to keep an eye on that, because usually not long after that is when you start to see some of the fraud and some of the more nefarious uses of that technology,” Battaglia said during the panel. Battaglia would not provide additional information about the FBI’s investigative techniques surrounding Monero, when asked after the event.

The FBI’s Cyber Division was founded in 2002, and according to Battaglia, the division splits it’s work equally between criminal matters and matters of national security. The Cyber Division is made up of squads located throughout the United States. Special Agent Battaglia explained that partnerships are made between the FBI’s Cyber Division and state police, the IRS, FinCEN, the Secret Service, and “detectives from all sorts of different law enforcement agencies.” At a keynote address, Special Agent Bataglia also mentioned how Monero is increasingly being used by ransomeware.

While Oasis has since gone offline, in an exit scam, AlphaBay continues to function and allow users to make deposits and withdrawals in both Bitcoin and Monero. AlphaBay began accepting Monero on September 1st, 2016. “Following the demand from the community, and considering the security features of Monero, we decided to add it to our marketplace,” a notice on AlphaBay said in August of 2016.