Privacy coins are now facing threat because of the regulatory requirements for transparency and they have to change if they want to survive. In today’s latest cryptocurrency news, we take a closer look in the analysis.
Privacy coins such as Dash, Monero and Zcash will have to change in order to be compliant with the impossible demands according to the Bloomberg reports. The coins that allow obscuring of transactions and offer anonymity features may be the next target for the regulators. For these coins, this will be very problematic since they are just picking up the new roles in the crypto space. Dash for example already trades on Coinbase PRO but without the anonymity features. In general, the traders that send anonymous coins to exchanges have to de-anonymize them so they can be later added to the balance of the account. The origin of the coins before the deposit process is very hard to track. With Dash, the anonymous options are not used by everyone. ZEC and XMR also have to be de-anonymized and they can only share the information with the selected parties.
On the other hand, the Bitcoin network is much easier to monitor since the destination addresses are visible and the balances are not veiled. This makes a bigger problem for the networks because the public addresses are known and they can be attacked by ‘’ dusting’’ ending up with fraudulent wallets and confusing the investigators later in the process. The anonymous coins are already getting delisted from Japanese exchanges and were first affected by local regulations. The privacy coins such as Verge and Bitcoin Private which are coins dedicated to secrecy may also be affected. The problem started in 2018 when the privacy coins failed to gain acceptance and later when Bytecoin was delisted from most of the exchanges after the scandals regarding the founding team emerged.
The OKEx delistings in October came right after the Coinbase UK platform and CEX.io decided to drop Dash and ZEC. Despite the fact that DASH, XMR, and ZEC are liquid and are already established on the market, their fate doesn’t look too good. According to the best cryptocurrency news sites reports, the privacy coins will have to be used as regular assets because their efforts to try something else can be smashed by the Financial Action Task Force.
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