Unsurprisingly, this year, regulators have started to pay close attention to cryptocurrencies. For example, as the price of Bitcoin (BTC) continues to rise, regulators are expected to start taking direct action – and perhaps even ban Bitcoin entirely.
While the ban may seem overwhelming, regulators have recently honed their use of privacy codes such as Monero (XMR), Zcash (ZEC), and Dash. For example, in September of this year, the IRS offered a reward of up to $ 625,000 to intelligence companies that could hack the untraceable privacy coin, Monero.
Moreover, on October 8, US Attorney General William Barr announced the release of a document titled “Cryptocurrency: Executive Structure.” A publication released by the Attorney General’s Digital Electronic Technology Task Force discusses the basics of tackling “the emerging threats and enforcement challenges associated with the growing diffusion and use of cryptocurrency.”
While the document discusses cryptocurrencies in general, the report specifically addresses issues related to “anonymous extended cryptocurrencies,” also known as AEC or privacy coins. The document provides examples of these confidential coins, including Monero, Zcash, and Dash, and claims to undermine anti-money laundering measures:
The adoption of anonymous extended cryptocurrencies or “AEC” – such as Monero, Dash and Zcash – by MSB and dark markets has increased the use of this type of virtual currency. As discussed above, since AECs use blockchains that are neither public nor private, the use of these cryptocurrencies undermines the AML / CFT controls used to identify suspicious activities of MSBs and other financial institutions.
Other organizational problems and concerns
After the cryptocurrency enforcement framework was released, ShapeShift, a Swiss cryptocurrency exchange that operates outside Denver, Colorado, removed the same three aforementioned privacy currencies.
While ShapeShift declined to comment on the matter, Ryan Taylor, CEO of Dash Core Group, told Cointelegraph that the Dash network was declared a privacy currency in 2014. confidentiality is. I mean – it was not peer-reviewed. “We are striving to correct this inaccurate classification,” he said.
Taylor also clarified that there have been no further changes since he dropped ShapeShift Dash. However, he remains optimistic about partnering with a non-custody exchange to re-list Dash. To explain:
We have been able to rely on a number of exchanges in various jurisdictions. These include eToroX in the European Union, Kraken and CoinSpot in Australia, and OKEx in Korea. ”
However, due to recent privacy currencies regulations, re-listing may be more difficult than before. Miko Matsumura, co-founder of Evercoin, a mobile wallet and exchange, told Cointelegraph that the recent US cryptocurrency app framework places a lot of emphasis on privacy currencies due to the idea that it allows users to evade sanctions imposed by the US Foreign Assets Authority. Monitor. He said: “ShapeShift is a little slow in introducing KYC procedures, so the pressure from the regulators should be high.”
Aside from re-listing issues, other cryptocurrency exchanges could follow suit and start removing privacy coins. Nathan Catania, partner of XReg Consulting – the regulator of crypto assets – told Cointelegraph that many cryptocurrency exchanges are likely to start removing privacy coins. “This could be due to outright bans or increased regulatory pressure on virtual asset service providers to treat privacy currencies as a higher risk for anti-money laundering purposes,” he said.
The two largest cryptocurrency exchanges in Asia – Japan and South Korea – are already taking steps to remove privacy coins. Catania also noted that even if confidential coins are not banned, it will take a lot of work and careful scrutiny to promote cryptocurrency exchanges to interact with customers who want to use confidential coins. However, Catania believes that for some exchanges, the risks and costs will not outweigh the benefits of supporting private coins, so it is likely that more exchanges will write off private coins in the future.
Confidential coins are expected to continue to be widely used on exchanges.
However, some experts disagree. Bill Barhedt, CEO of Abra, a peer-to-peer payment platform that supports over 70 cryptocurrencies, including Dash, told Cointelegraph that Abra works closely with external security partners. He stated that as far as he knows, these partners do not plan to write off any widely used cryptocurrencies in the market today. Dash will fall into this category as its current market rank is 31st on CoinGecko with 9.8 million coins in circulation.
In addition, many cryptocurrencies are compatible.