Bittrex announced Friday that Monero (XMR), Zcash (ZEC) and Dash (DASH) would be delisted, following a pattern among cryptocurrency exchanges to delist so-called privacy coins.
In a statement, the exchange said that on Friday, Jan. 15, at 23:00 UTC, the coin markets would be removed.
Although Bittrex offered no explanation for the removals, exchanges across the globe have moved to delist coins that aim to protect their users’ anonymity as a way to comply with worldwide know-your-customer (KYC) and anti-money laundering (AML) legislation.
A Growing Trend of Privacy Coin Regulation
For example, the U.S. The Secret Service encouraged Congress to build ways to regulate the usage of cryptocurrency that rely on privacy.
Congress has been requested by a top official in the US Secret Service to take measures against privacy-centric cryptocurrencies such as Zcash and Monero, which have features intended to assist users in making anonymous transactions.
In a prepared testimony delivered before the House of Representatives, Robert Novy, deputy assistant director of the investigation office of the Secret Service, called on lawmakers to take steps to curtail the usage of so-called “privacy coins.”
“We should also consider additional legislative or regulatory actions to address potential challenges related to anonymity-enhanced cryptocurrencies, services intended to obscure transactions on blockchains (i.e. cryptocurrency tumblers or mixers) and cryptocurrency mining pools.”
Monero and other privacy-oriented currencies have concerned regulators targeting illicit activities and money laundering. Exchanges in South Korea and Australia have delisted Monero and other privacy coins due to regulatory pressure.
In September 2020, the IRS Criminal Investigation (IRS-CI) division offered up to $625,000 to contractors who can trace transactions or provide statistical probabilities that connect transaction data to specific users in Monero or Bitcoin’s Lightning Network.
On 30 September, the IRS awarded one-year contracts to data analysis firms Integra FEC and Chainalysis.
Shares of all three coins plunged on the news: XMR dropped 14.44% to $133.75, ZEC dropped 12.28% to $55.76.
Bittrex was not specific with reasons behind the delistings. Their press release is as follows:
“The following markets will be removed on Friday, January 15, 2021, 23:00 UTC.
BTC-XMR, ETH-XMR, USDT-XMR
BTC-ZEC, ETH-ZEC, USDT-ZEC, USD-ZEC
BTC-DASH, ETH-DASH, USDT-DASH, USD-DASH
You must perform any trades with these tokens no later than Friday, January 15, 2021, 23:00 UTC.After the markets are removed, Bittrex generally seeks to provide users up to 30 days to withdraw any delisted tokens, but in certain instances the withdrawal period may be shortened. Users should withdraw any tokens before the posted withdrawal deadline. There may be circumstances under which a user may not be able to withdraw a token due to events outside of Bittrex’s control. For example, there could be technical difficulties (e.g., the blockchain is broken) which prevent users from being able to withdraw their tokens.”
What are Privacy Coins?
Privacy coins are special cryptocurrencies that, when making blockchain transactions, allow a consumer to obtain complete anonymity. Users’ identities and the source of their purchases are fully secured.
These coins enable senders and recipients, including secret wallet addresses and transaction balances, to stay anonymous with various degrees of privacy. Payments actually stay confidential with privacy coins.
Privacy coins carry Bitcoin’s anonymous existence and culture of privacy to the next stage. As you begin to grasp privacy coins, you will begin to see that Bitcoin is actually not that private itself. Many blockchain novices assume that purchases with Bitcoin are anonymous.
The reality is that anyone who knows the technological complexities of the processing of Bitcoin transactions and the operation of the blockchain will be able to monitor transactions. With privacy coins, this specific disadvantage is not apparent.
