During a Czech interview, Chainalysis employee Aleš Janda answered questions about Bitcoin and Monero. The full interview (in Czech) is here: https://youtu.be/JiKiM8HsDNo
The interview includes the most descriptive public comments about Chainalysis's Monero projects that I am aware of.
Monero community member armitage2200 brought this interview to my attention and was kind enough to make a translated transcription for us. Please keep in mind that from this point on, I am relying on these as the source since I do not understand Czech. Link to this transcripts in full. These are quotes of the transcript, not the direct video source. I have lightly cleaned up some of the below for spelling and grammar only.
"I like Monero, just because it is really smart designed. This makes a demand for tracing monero. I was working on monero full time maybe a year and quarter."
"A cryptocurrency is traceable because people leave some footprints (evidences). The evidences are of two kinds: One of these kinds are Technological limits of particular cryptocurrencies, for example in bitcoin there are amounts, addresses, change addresses - what means if I send something somewhere, the rest is sent back to my change address. Then I can estimate what is [the change output] back (of the tx) and from this I can estimate what has been sent forward. And many more... The second source of traceability are Human limits. A human behaves somehow predictably and naturally. It is very hard to behave somehow randomly or unnaturally."
"Monero has done the Technological part very good. Transactions look considerably equally. And then, in the majority of cases, I am not able to say if two different txs are done by the same user. Neither exclude, nor confirm. It is not fully flawless, but Monero is done really nice. One of the trick how they do Monero is(except of the insane math - in my opinion really brilliant algorithms) they do every year or half-year a planned hard-fork. It means the rules will be changed, we don't actually know the rules, but we know exactly the rules will change next year and will be different. When the date of hard-fork is coming, the devs publish those rules and everybody has to migrate to the new rules. This is terrible for decentralization and so, because there are a small group of devs which dictate the rules, but most people don't mind. On the other side, they force that all txs are looking the same and this is very good - for anonymity."
"I liked Monero even before. but when I started to work on Monero full time, and tried to uncover all the algorithms, I like it much more 🙂 because is really good invented. By this, I don't want to say, It is not possible to deanonimize it, but also I don't want to say It is possible."
"Q [from interviewer] - I remember the message, [the DHS] say something like "Don't use Monero, because we can track it!" I had a feeling the message is something like threatening warning or fake alert... just because they want to discourage everybody from using it."
"A [from Aleš] - Maybe , maybe ... 🙂 There is nothing total anonymous. Even though something is very close - like Monero. Regarding Monero, also the devs themselves know about few weaknesses, which are described and well documented. On YouTube you can find a good YT channel Breaking Monero, where are for about 14 episodes. It say something about ways how to deanonymize Monero and what could be theoretically possible. Every episode analyzes a different weak point. This is for example a good resource (of knowledge), what in Monero would be possible to do. Maybe I am not allowed to open about that anyways. [simply he cannot say more ...]"
Relating mostly to Bitcoin:
"For example Chainalysis does no dust attacks. Maybe the attack is performed by some investigators, who are trying to focus on a specific target."
Final comments not related to the interview are below:
Note: certain types of targeted dust attacks, typically called poisoned output attacks, are quite effective on Monero. You should assume that targeted individuals may be the subject of poisoned output attacks.
Get informed on Monero's limitations: https://www.monerooutreach.org/breaking-monero/
I will be learning more about what Chainalysis and Integra FEC are doing with the IRS contract in less than a month, and will update the community then.
Obviously, tools built for Monero will be substantially less effective for arbitrary transactions than they would be for any other cryptocurrency. That is the power of privacy by default.