The decision, which will take effect from Feb. 20, follows Binance's regular reviews aimed at ensuring listed digital assets meet the platform's “high standards.”
Binance announced its decision to delist Monero (XMR) along with Aragon, Multichain, and Vai, effective February 20.
Following the news, the price of Monero’s native coin, XMR, plummeted by 32%, and some exchanges decided to delist the privacy coin in the wake of increased regulatory scrutiny.
The End of Monero?
The delisting, while not entirely unexpected, has raised questions about Monero's future. In January, Binance put a “watch tag” on Monero and several other assets. Rival exchange OKX also delisted Monero, Zcash, and Dash last month.
The crypto community is now concerned that this could mean the end of privacy-focused coins like Monero.
Regulatory Tensions Over Privacy Coins
Privacy coins, designed to make transactions more anonymous, have faced regulatory strain globally as the technology has come under increased scrutiny due to concerns it could be misused for illegal activities such as money laundering and terrorist financing.
Exchanges are caught between customer privacy demands and complying with global financial regulations.
The European Union's Markets in Cryptocurrencies Regulation (MiCA) prohibits trading platforms from accepting cryptocurrencies with anonymization features. Compliance requires the identification of asset holders and their transaction history. By December 2024, privacy coin developers and exchanges must work together on a technical solution.
The Uncertain Future of Privacy Coins
Binance's dominance, with $15 billion in daily trading volume, poses a major challenge for privacy-focused projects: The exchange, which pleaded guilty to violating U.S. banking laws in November, has come under pressure to strengthen its anti-money laundering and know-your-customer controls.
Additionally, the recent indictment of the founders of Tornado Cash, who were charged with laundering over $1 billion in criminal proceeds, highlights the regulatory environment's stance towards privacy projects. Tornado Cash, known for its privacy features, is facing sanctions violations and money laundering charges.
Monero and Zcash have a combined market capitalization of $2.5 billion, but Binance's delisting poses significant risks to the future of both companies, as challenges from regulatory pressures, combined with compliance needs, have raised doubts about the viability of privacy-focused projects in the current environment.
