In a controversial move, Binance recently decided to delist privacy coins such as Monero, ZCash, and others in several countries, including France, Italy, Spain, and Poland. While some Monero users advocate for keeping their tokens off exchanges to preserve privacy, listing privacy coins on exchanges has its merits – it facilitates new user adoption, bolsters liquidity, and contributes to price momentum.
Although European Union regulators recently enacted Markets in Crypto-Assets rules and a Travel Rule, which require collecting user data and identification information, privacy coin users and exchanges listing privacy coins can indeed comply. For example, ZCash offers a transparent send function and an option to privately share view keys in shielded transactions. Monero provides a similar view key feature. Hence, Binance’s overreaction is not a result of any clear regulatory mandate.
This decision by Binance might have less to do with European regulators’ demands and more to do with its unique circumstances, such as its legal dispute with the Commodity Futures Trading Commission over alleged failures to uphold requisite Anti-Money Laundering measures. Furthermore, savvy users in countries where privacy coins are banned, like the United Arab Emirates, can still acquire them via virtual private networks to access peer-to-peer transfers or decentralized exchanges.
Cryptocurrency exchanges should avoid banning privacy coins when there is no legal obligation to do so, as this might result in a self-created chokepoint, similar to the U.S. government’s “Operation Choke Point.” Notably, regulated exchanges, such as Kraken and Gemini, manage to comply with U.S. Anti-Money Laundering laws and even list privacy coins.
Privacy tools in cryptocurrencies are just that – tools. They can be used both for legal and illegal activities. The crypto industry must establish a balanced regulatory environment that respects users’ privacy while also deterring and punishing illegal activities.
Binance should reconsider its decision to delist privacy coins and instead work closely with regulatory bodies and crypto organizations to create a regulatory environment that respects and protects user privacy while ensuring compliance with laws and regulations. In the long run, companies that fail to take privacy coins and privacy tools seriously may lose market share to those that do.
Source: Cointelegraph
