Death spiral for privacy coins? Crypto exchange Bittrex removes Monero, Zcash and Dash
Crypto exchange Bittrex announced on December 29th that it would remove the US markets for three of the largest privacy coins by market capitalization – and that already on January 15th, 2021. Then Monero, Zcash and Dash will no longer be tradable on the portal .
Bittrex writes that users have 30 days to withdraw their coins:
„After the markets are removed, Bitcoin Lifestyle app generally tries to give users up to 30 days to withdraw any delisted tokens, but in certain cases the withdrawal period can be shortened. Users should withdraw all tokens before the published withdrawal period. “
A reason for the delisting was not given. Larry Cermak, director of research at The Block, speculates that the delisting may be in response to anti-money laundering (AML) regulations.
According to Bloomberg, all virtual asset service providers (VASPs) must collect information about their customers and the recipients of funds and send this data to the recipient’s service provider with each transaction. With coins that are geared towards privacy, this requirement can be difficult or even impracticable.
Because the FATF (Financial Action Task Force) recognizes cryptocurrency exchanges as VASPs, they are essentially adhered to the same standards that banks and other financial service providers have. The new standards, released on Friday June 21st, are the officialization of the FATF proposal made in early February.
The controversial rule has not been well received by the crypto industry as, as mentioned, many crypto exchanges and wallet providers are unable to collect and send the data required by the FATF.
In order not to be targeted by the authorities, the exchanges could remove the respective coins from trading as a precaution
In response to the announcement on Friday night’s Bittrex Twitter account, Monero, Zcash, and Dash prices all fell in the 7-15 percent range.
It remains to be seen how this situation will develop. Will there be a death spiral for privacy coins because exchanges expect the legislature to crack down?