>Monero's technology enables private and untraceable transactions
Not exactly. The decoy inputs/outputs provide some plausible deniability when you look at a transaction in isolation, but over repeated transactions it gets gradually lost. It's not enough to pin you as a criminal with 100% certainty, but it's enough for the police to keep an eye on you and wait for you to slip up.
Doesn't this require an exchange to provide external information? It is my understanding that it's impossible to correlate transactions using blockchain analysis alone.
>Doesn't this require an exchange to provide external information
or a donation address, or a cooperative counterparty when you buy/sell something (think darknet market that got radided, or a payment processor that sells its transaction information).
Not exactly. The decoy inputs/outputs provide some plausible deniability when you look at a transaction in isolation, but over repeated transactions it gets gradually lost. It's not enough to pin you as a criminal with 100% certainty, but it's enough for the police to keep an eye on you and wait for you to slip up.