Government agencies want to get a grip on cryptocurrency and privacy coins make that a lot harder. It is difficult to trace who sends what. Privacy coins broadly correspond to what cryptographically encrypted currencies are intended for, namely to send anonymous transactions.
Privacy coins are excluded from exchanges
But this also ensures that cryptocurrency exchanges, which are confronted with increasingly strict rules, may not dare to offer privacy coins anymore. There are already some practical examples:
- Coinbase UK recently removed Zcash for unclear reasons. An assumption, but this seems to have been inspired by British regulations.
- Exchange OKEx, based in South Korea, has announced that it will remove three privacy coins from its platform. OKEx does not make any sense and says that this is due to regulations.
- It is somewhat contradictory at Binance, because they work in different countries. For example, no privacy clauses are offered on Binance US. But Binance Lending has just announced support for Monero, Zcash and DASH.
In the Netherlands, Zcash and Monero are offered in the free app BLOX crypto trading.
Privacy violations
Jesse Spiro heads cryptocurrency research agency Chainalysis Inc. In conversation with Bloomberg, he stated that regulations are a major obstacle to the continued existence of privacy coins. Spiro predicts that the situation will only get worse for privacy coins and that if these currencies disappear from platforms, liquidity and trade volume will suffer.
Spiro is not the only one who thinks this. Galgitron does not expect privacy coins to survive at all unless they are offered on decentralized exchanges (DEX).
Privacy coins are on their way out. Anything that facilitates money laundering / tumbling simply will not survive.https: //t.co/2F8au1e1tC
– galgitron (no price predictions) (@galgitron) September 16, 2019
Reply Monero and Dash
However, the teams from both Monero and DASH believe that they can meet the legal requirements.
- Monero claims that the privacy coin has a “view keys” function that allows the account owner to investigate his transactions. Although supervisors may not have access to this function, this is a start.
- Dash Core Group Inc. CEO, Ryan Taylor, compared DASH with Bitcoin and claimed that DASH is 100 percent capable of meeting legal requirements. Taylor states that this is because DASH is not inherently private. DASH has a PrivateSend feature that traders can tick to hide their wallet address before sending. Taylor also says that DASH cooperates with BlockchainIntel and Coinfirm. This cooperation should lead to a rapprochement with the regulators.
The role of privacy and cash
As long as there are people who care about their privacy, there will always be a role for privacy coins. And that does not necessarily have to do with the covering up of crime. Sometimes you just don’t want other people or organizations to know what you are buying and then you use cash. Privacy coins can take over this role.
The question is whether you can buy these coins at a regulated exchange.
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