Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Privacy Coins Forum => Topic started by: Zed0X on September 22, 2019, 09:43:08 AM
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News broke out that OKEX Korea will be delisting privacy coins Monero (XMR), Dash (DASH), Zcash (ZEC), Super bitcoin (SBTC), Horizen (ZEN) as they try to comply with the recently published FATF Guidelines on cryptocurrencies (http://www.fatf-gafi.org/media/fatf/documents/recommendations/RBA-VA-VASPs.pdf) specifically the Travel Rule.
The travel rule requires that cryptocurrency exchanges collect and record customer information related to cryptocurrency transactions. The information includes the transaction originator’s name, account number and location, as well as the recipient’s name and account number.
Since they cannot properly collect data on privacy coin transaction, they would rather delist it.
Upbit, another Korean exchanges, has also announced its plan to delist privacy coins to abide by the FATF guidelines.
According to a notice from Korea exchange Upbit, transaction support for monero (XMR), dash (DASH), zcash (ZEC), haven (XHV), bittube (TUBE), and PIVX (PIVX) will end Monday, Sept. 30.
It has to be noted also that prior to the release of the Travel Rule, some exchanges have already delisted these type of coins.
With these developments, I think we can say that government authorities believe these coins are illegal and they keep on pressuring crypto exchanges to delist them. I'm expecting many more local exchanges to follow suit but bigger/international exchanges will keep them listed until the FATF Travel Rule becomes mandatory.
What do you think is next for these privacy coins?
Will they do changes to comply with the guidelines? or they will just ignore?
NOTE: I've already posted a similar topic in another forum
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The Travel Rule is the latest blow to these privacy-centric coins. I also wonder how these devs will react once FATF member countries adopt this rule and more and more exchanges will be forced to delist them. I don't think they'll bow down and it is possible that we will see "underground coins" and "mainstream coins".
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Hopefully we don't see anymore delisting of these privacy coins from major exchanges. I was made aware of this group called Ciphertrace and they were making proposals to aid government authorities combat money laundering and terrorism funding while preserving privacy. Personally, I think their proposal will take a long time to build. For the sake of legit crypto enthusiasts and the regulators, I hope they can build that solution soon.
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I just read another article today related to this topic.
It's about the response of some privacy coin devs to the rule. It's interesting how they promoted their projects as privacy coins before but changed their tune after the travel rule was published. The backpedalling may have contributed also to the drop in prices of these coins in recent months. Those who got sold of the privacy features are selling now because the supposedly privacy coins were no longer private all of a sudden.
In August, Dash Core Group CEO Ryan Taylor published a blog post in which he appeared to distance the project from its privacy features. The post stated that “the required processes and compliance tools for Dash are identical to those required to support Bitcoin.” By this reasoning, since PrivateSend uses the same mixing techniques which are available for Bitcoin, then Dash is no more a privacy coin than BTC is.
Zcash appears to be taking a similar approach. Last week, Electric Coin Company, which operates Zcash, published a blog post of its own.
Jack Gavigan, who heads up the company’s Regulatory Affairs division, explains that Zcash is also no different than other cryptocurrencies. In fact, somewhat ironically, it’s more compliant with the FATF transparency requirements than other coins which don’t make claims to privacy.
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A bit more info for people (like me) who never heard of this travel rule law before:
To the extent that any of the money transmitter’s transactions constitute a “transmittal of funds”29 under FinCEN’s regulations, then the money transmitter
must also comply with the “Funds Transfer Rule” and the “Funds Travel Rule.” [31]
[31.] See 31 CFR § 1010.410(f).
Source: https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf
This takes you to this legislation:
31 CFR § 1010.410 - Records to be made and retained by financial institutions.
§ 1010.410 Records to be made and retained by financial institutions.
Each financial institution shall retain either the original or a copy or reproduction of each of the following:
(F) As many of the following items as are received with the transmittal order: 1
1 For transmittals of funds effected through the Federal Reserve's Fedwire funds transfer system by a domestic broker or dealers in securities, only one of the items is required to be retained, if received with the transmittal order, until such time as the bank that sends the order to the Federal Reserve Bank completes its conversion to the expanded Fedwire message format.
(1) The name and address of the recipient;
(2) The account number of the recipient; and
(3) Any other specific identifier of the recipient; and
(G) Any form relating to the transmittal of funds that is completed or signed by the person placing the transmittal order.
(ii) For each transmittal order that it accepts as an intermediary financial institution, a financial institution shall retain either the original or a microfilm, other copy, or electronic record of the transmittal order.
(iii) For each transmittal order that it accepts as a recipient's financial institution, a financial institution shall retain either the original or a microfilm, other copy, or electronic record of the transmittal order.
Source: https://www.law.cornell.edu/cfr/text/31/1010.410
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^ Yes, they are adopting that rule for financial institutions and apply it to cryptocurrency exchanges as well.
To the above exchanges view, requiring KYC is no longer enough to acquire those information if exchange users transacts using privacy coins.