Several crypto coins, which are known as privacy coins, have long delighted libertarians and frustrated law enforcement, are feeling the pinch of a step up in regulation.
Privacy coins like Dash, Monero and Zcash are making it difficult for exchanges and custodians to comply with fresh international guidelines to prevent illicit financing.
Some of the exchanges are deciding to delist these coins rather than trying to find out how to adhere to the extra risk management requirements. Coinbase UK dropped support for Zcash on September 10, OKEx Korea is planning to delist five coins - Monero, Dash, Zcash, ZCache, Horizon and Super Bitcoin.
Jesse Spiro, head of policy at Palo Alto, California-based crypto investigative firm Chainalysis Inc. said that it’s obvious that privacy coins are facing a huge hurdle.
This is already causing a problem for a great part of the crypto market. Monero, Dash and Zcash have a cumulative market capitalization of about $2.5 billion. Prices dropped rapidly: Monero lost approximately 30%, Dash over 40% and Zcash about 50%.
Chief investment officer at Arca Jeff Dorman supposes that there’s a big chance that many coins can be delisted and liquidity is going to dry up.
The privacy coins are still popular with hardcore crypto enthusiasts, who say governments should take a hands-off approach to the coins, specifically designed to avoid their grasp.
FATF is going to conduct a review of how its member countries are implementing the guidance in June 2020. Lack of compliance could lead to the closing of exchanges and penalties.