Beyond the distraction that the ATH of different cryptocurrencies that has been generating among the crypto community, States keep moving their chess pieces to go against one of the main principles that cryptocurrencies have offered since its inception, privacy. In the midst of this war, the artillery is targeting projects with enhanced features for ecosystem privacy, Monero, Zcash, and Dash.
In December we were able to see how the Financial Crime Control Network, FinCEN for its acronym in English, landed one of the latest blows against cryptocurrency privacy by pose a series of limitations and restrictions on the use of self-custody wallets. The move appears to seek to reinforce the use of wallets on exchanges where users can only access cryptocurrencies by going through a KYC process.
Despite being one of the biggest regulations that the American authorities are seeking against the privacy of cryptocurrencies, it is not the first attempt they are raising. For some time we have seen how efforts against privacy coins have been increasing.
Background of States Against Privacy Cryptocurrencies
In September 2020 we find that The tax authorities of the United States came to offer a reward of up to 625 thousand dollars for the developer who will manage to decipher and break the privacy system offered by Monero and the Bitcoin Lightning Network. So far it has not been reported if any developer has managed to claim such a “prize”.
In fact, the war on privacy is not limited to the United States. Also at the end of last year we were able to witness how since France se imposed a direct ban against privacy coins in the midst of a new body of regulations proposed to fight terrorism and money laundering.
Likewise, in the past we could see how from the Asian continent, specifically in South Korea, the authorities announced that they were working on a system to better track privacy cryptocurrencies and their use on the Dark Web and more recently, in November of last year, it was announced that Privacy-focused cryptocurrencies would be banned within South Korean jurisdiction.
Exchanges adjusting to reality
Beyond the anarchism and liberatory ideas normally behind cryptocurrencies, exchanges have had to adjust to the reality they are living. From South Korea itself, we have seen how Bithumb, one of the largest exchanges in the Asian market and in the world, decided to eliminate Monero of its operations in May of last year. This occurred after the coin was involved in child pornography operations against which the government was battling.
In Australia it was also possible to see Swyftx, a local exchange, that He decided in August of last year eliminate all cryptocurrencies and privacy tokens that operated on its portal. In addition to Monero, Dash and Zcash, the exchange also decided to delist Verge, Horizen, Komodo, Firo, and Groestlcoin.
Shapeshift, a Swiss-based exchange, also decided to remove Monero, Dash, and Zcash from its cryptocurrency list., doing it in a rather stealthy way but it was noticed by the public itself. When discovered, the representatives they said which they decided to eliminate due to the pressure that the authorities had been doing.
The last exchange to make headlines for taking the step of eliminating privacy coins was the American exchange Bittrex., who just started in 2021, reported that as of January 15 the Dash, Monero, Zcash and Grin coins would no longer be available to trade within their platform.
The effect on currency prices
Now, even though these government measures have forced exchanges to take action, the privacy coins continue to work perfectly and without major inconveniences, without demonstrating even attempts by government authorities to take any kind of control over them.
Nevertheless, the effect of government actions in this kind of “war against privacy” if it has reached the markets and has ended up affecting these currencies in another aspect, their price.
To point out, We can confirm how Monero, Dash and Zcash, the privacy-focused cryptocurrencies with the greatest volume and weight within the crypto market, have been affected, and as despite the impressive rally that we are experiencing in the markets, their prices are far from their all-time highs.
The price of Monero has been lowered by 20%
Starting with Monero, which is the best positioned privacy coin on the market, we observe that its historical maximum of 465.84 dollars per coin reached on December 20, 2017 is far from the 140.92 dollars that we see today, according CoinMarketCap data at the time of writing this note. In fact, evaluating its price we can see that Bittrex’s announcement affected him with a loss of close to 20% in its price, according to CoinMarketCap data for the dates.
Dash price dropped 10%
Continuing with Dash, we can see that its current price of $ 93.89 per coin, price taken from CoinMarketCap At the time of writing, it is a long way from its all-time high of $ 1,531 per coin on December 20. Like Monero, Bittrex’s decision caused Dash to crash, although in this case it was close to 10% on your price, according to data provided by CoinMarketCap.
Zcash price dropped 15%
By last, We can evaluate Zcash, with $ 881.42 established as the historical maximum of the coin on January 7, 2018, while it presents a price of $ 62.84 at the time of writing according to CoinMarketCap data, a figure that also presents it far from its historical maximum. The currency also did not escape the effect of Bittrex and on the day of January 1 it ended losing 15% of value.
What do the representatives of private currencies say?
To know the real effect that these measures have been having within these cryptocurrencies, we have spoken with different representatives of them, thus seeking to evaluate their positions in the face of the acts carried out by the exchanges.
The inability to cope with regulation
To assess Dash’s position, we have managed to talk with Ernesto Contreras, Head of Business Development at Dash Core Group, who was first asked about his opinion on the actions of exchanges to remove Dash from their lists.
First, it reflected that it was clear that the removal of Dash was part of “a decision to mitigate the perceived risk of trading privacy cryptocurrencies”, a risk that he explained that is perceived by the regulatory advances that are being carried out for operations with anonymity cryptocurrencies.
However, Contreras reflected that the problem with this decision centered on the fact that There are no requests from government entities to remove these currencies from the markets and they are only perceived risks. Even Contreras explained that these measures should not affect Dash, since it is not even a privacy coin.
In addition, he also added that these actions that exchanges are taking for sliding privacy coins it is something very punctual, detailing that particularly in the United States jurisdiction only Bittrex has been seen making this decision.
“We understand that Dash’s departure from Bittrex creates a perception of FUD, but we understand that it is an isolated case and one that we hope to resolve to the satisfaction of Dash and users soon.”
To close on that point, Dash’s rep explained that the coin is listed on more than 156 exchanges globally, adding that it is present in the highest volume markets such as Binance, OkEx, Bitfinex; as well as Coinbase, Kraken, Uphold, consolidated exchanges in the United States.
On the other hand, Contreras also expressed his opinion about the actions that exchanges have had to take due to state pressure against privacy cryptocurrencies, to which he first clarified that “It is necessary to understand that the Exchange are companies established in a country” and as such they need to comply with the regulations that are required within them.
Despite this, Contreras said that many times you get to see a overcompliance reaction on state regulations, which implies that these companies decide to “eliminate all real and perceived risks, rather than work with regulators to educate them and correct the problem.”
“This usually happens when they are small teams or when they have no interest in maintaining this market”Contreras identified referring to companies that tend to fall into this type of“ overcompliance ”practices.
However, despite the situation being described, Contreras mentioned that from Dash Core Group they remain “optimistic” and mentioned that he hopes that the joint work with the exchanges can help to comply with the appropriate KYC / AML regulations., mentioning that he also hopes to resolve misunderstandings with regulators through “education and communication.”
There is no public regulation that prevents Bittrex from listing Zcash
Meanwhile, from the Electric Coin Company, the company behind the development of the Zcash cryptocurrency, BeInCrypto has managed to get feedback from Josh Swihart, who holds the position of Senior Vice President of Growth of the company.
About the most recent action Bittrex took to delist Zcash from its exchange, he mentioned that from the company they are not in the work of “defining what regulated exchanges should or should not do to comply with regulations”, mentioning that that is something that should be limited between exchanges and regulators. However, if you mentioned that in the case of Bittrex it could be seen that “there is no public regulation that prevents them from listing Zcash”.
Likewise, in a release shared by the Electric Coin Company this January 4, announced that they have tried to make “multiple attempts to contact Bittrex” but have not yet established any contact with the company.
In conclusion to its statement, the company behind Zcash stated that these types of actions by Bittrex are “censorship” and represent a “challenge to our human rights”, arguing that “privacy is normal, safe and essential” for everyone.
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Dash, Monero and Zcash at the forefront of the war on privacy – BeInCrypto