The new guidelines by the FATF have molded the privacy coins’ journey of success. On the way of implementing the travel rule, the force has forced the exchanges in commencing harsh moves towards the coins. Privacy coins are facing a considerable threat amid the regulations as numerous platforms are proceeding to delist the coins.
FATF’s new rule is a privacy threat
Under the new regulatory pinch of FATF, the crypto firms must unveil the data of customers when a transfer is above or equal to $1000, which is ascending as a privacy peril. Cryptocurrencies such as Monero, Zcash, and Dash, possessing the tendency of obscure transactions are making it challenging for the exchanges to cope up with the rule. Rather than putting these coins under the guidelines, the platforms are keeping their foot on an easier path of removing them from their network.
OKEx Korea eliminate privacy coins
The virtual currency exchange, OKEx’s Korea unit, delisted all the five privacy coins – Monero, Dash, Zcash, Horizen, and Super Bitcoin. The coins do not permit the gathering of private details and hence, violate the enforced regulations. Currently, the decision is applied only on the Korean sector of exchange; however, it is speculated that it will be implied globally. The transaction support for these coins on OKEx Korea will subsist till October 10, while the withdrawal services will extend up to December 10.
The UK CEX.io ceases support for Zcash and Dash
The FATF guidelines have framed a life or death struggle for the privacy coins. The UK based trading platform CEX.io delisted Zcash and dash. Coinbase UK also removed the support for Zcash.
UpBit delists Monero, Dash, and Zcash
UpBit, the South Korean crypto exchange is the latest network to declare the cessation of six cryptocurrencies, including the private coins. The end of September will terminate the trade of Monero, Dash, Zcash on the platform.
Will the new guidelines crash the crypto market?
Announced in June 2019, the rule aims to combat the use of cryptocurrencies in terrorist funding, and money laundering, which has pushed such regulations into action. The ax of FATF rule swinging on the exchanges is undoubtedly affecting the crypto world in an unwanted manner. At present, XMR, Dash, and Zcash rank 12,16, and 28 on the market cap, respectively. Delisting of coins which have secured a spot among top 50 cryptocurrencies can prove to be a dark move.
CipherTrace brings TRISA to assist privacy coins
To figure out how to comply with FATF’s guidelines has unfolded as a puzzle. To put the pieces right and solve the maze, CipherTrace jumped in as the savior of the privacy coins. The blockchain security firm released TRISA – Travel Rule Information Sharing Architecture, to enable crypto firms to abide by global regulation. The purported solution will allow the trade platforms and wallet providers to share payment details and confidentially exchange customer KYC details. Exchanges who adopt TRISA would create an “extended validation know-your-VASP” certificate which would be sent to the exchange receiving the transaction from the one originating it. A third-party would further verify these certificates.
Netki, the KYC anti-money laundering provider has also upgraded its digital ID services to adhere to the stringent global guidelines. The overhaul will assist in breaking down the user certificates of personal information.
Patrons raise voice against regulations
The crypto patrons expressed their disappointment towards the new regulation on several crypto forums. The rule inaugurated to fight illicit acts carried through cryptocurrency didn’t seem fair to people as they highlighted the significant use of traditional money for major crimes. The attempt to convert bitcoin exchanges into banks is not appreciated and defined as absurd. Furthermore, the digital world followers demanded reasonable answers for the suspension of Zcash from the Coinbase UK.
Eric Turner, the director of research at crypto research firm Messari, told Bloomberg about the FATF’s guidelines’ potential of impacting the crypto world more than the SEC or any other regulator till date.
Bitbond CEO, Radoslav Albrecht, acknowledged the importance of regulations but regarded FATF’s move as a step too big. Licensed by BaFin, Bitbond is on the way of issuing one of its first security tokens.
FATF’s guidelines can drown the exchanges
The new rules hold the potential of hurting small and medium-sized enterprises that might not have the resources to adopt the latest legal requirements. Also, the services which have attained licenses could face ascended scrutiny from the authorities and might lose it all if they fail to comply with the FATF regulation.
FATF’s call of revealing the users’ information has failed to gain any support. Moreover, it is regarded as a major burden that is extremely inefficient and time-consuming. Where the majority of the wallets are anonymous, the rule demanding every detail about the trader is somewhat a complex proceeding.
Chainalysis reported the technical obstacles prevalent in the cryptocurrency sector that prevent the platforms from being able to comply with the FATF’s standards. The identification of the trading parties is technically unfeasible as to identify the mode of trade is itself quite complicated.
Binance stands with untraceable crypto
Although a significant number of exchanges have turned their back on the privacy coins, Changpeng Zhao declares to stand in their support.
FATF’s new rules are impacting the crypto industry at a deep level. Will this turn out to be a war against cryptocurrencies, or will the digital coins lose their principles?