Seychelles-based cryptocurrency exchange Huobi has announced that it will delist seven privacy coins, citing new financial regulations. However, some analysts believe the main motivation for the move was a planned entry into the US market.
Monero, Other Privacy Coins Move Away From Crypto Exchanges
In addition to deprecating the popular Monero, Huobi has deprecated six other privacy coins altogether. Dash, Decredo, Philo, Horizon, Verge and ZCash. Trading in these privacy coins closed on September 6th, and new deposits closed on September 12th. Any remaining orders not closed at the time of delisting will be automatically canceled and credited to the user’s spot his account.
Huobi’s brief statement published on September 11 vaguely alluded to “new financial regulations” without going into detail, and also cited Article 17(16) of the Huobi Global Token Management Regulations. Privacy coins like Monero add a layer of anonymity to transactions, allowing a third party to see the movement of funds between wallet addresses, just like you can do with Bitcoin and other more standard tokens. make it impossible.
The financial regulations that exist generally focus on the use of privacy coins in criminal transactions, most notably ransomware payments, money laundering, and funding terrorism. Some countries, notably Australia, Japan and South Korea, have banned them outright and will not allow domestic-based cryptocurrency exchanges to offer them. No, but the regulatory mood seems to be heading in that direction after the Secret Service and other government officials recommended that Congress get involved. has issued guidance encouraging the demise of cryptocurrency exchanges.
Given this situation, major US exchanges such as Coinbase and Binance have voluntarily transferred privacy coins even though they are not legally required to do so. US law enforcement was able to track and “clawback” ransomware payments made via Bitcoin through Coinbase and other exchanges. Especially in the case of the Colonial Pipeline attack in 2021, it contributed to political tolerance towards cryptocurrencies. One with a public ledger.
Some have speculated that Huobi may have made the move as part of its plans to expand into the US. The crypto exchange received a Money Services Business (MSB) license from the US Financial Crimes Enforcement Network (FinCEN) in July of this year. This is the first step required to offer fiat currency exchange services in the country. But there are other hurdles the company has to clear before opening stores in the U.S., primarily the need to obtain a money transfer license. Huobi was essentially forced into western expansion after its cryptocurrency de-legitimization in September 2021, mainly when its user base in China dwindled. The group is seeking similar licenses in New Zealand, the British Virgin Islands and the UAE.
Can financial regulation put an end to privacy coins?
Governments of most of the world’s major countries will not deal with privacy coins, believing that they are very difficult to track and have no real advantage in instant global transactions offering the potential to keep money out of the hands of others. made it clear that he prefers Tax accountant. But privacy advocates argue that this layer of anonymity has necessary uses, such as the safety of those making large legitimate transactions or donating to political causes. .
The government’s approach might be to pressure exchanges to issue privacy coins voluntarily, but this appears to be working and financial regulation seems to play a big role. Issue coins and incorporate them into financial regulations. There is also the fact that according to numerous recent reports, only about 1% of all crypto transactions are known to be criminal in nature (with certain personal privacy coins this number increases significantly ). Criminals also continue to demand Bitcoin ransoms at just over double his rate for Monero, which is generally considered the most anonymous option (albeit not easily available to victims). often).
Privacy coin and financial regulation issues are tied to recent actions against coin mixers. Coin mixers are widely used tools by digital criminals to cover their tracks, but they also have legitimate applications that other means do not offer. The recent U.S. sanctions issued against Tornado Cash and other services are largely out of concern that such decisions may establish legal precedents that sanction software and tools rather than individuals and organizations. , has been challenged in court by Coinbase and other parties.