Important points
- Privacy coins are under pressure in Europe as new regulations come into effect.
- The new rules could ban or restrict crypto blenders and self-hosted wallets.
- XMR trading and deposits will be suspended for users in Ireland and Belgium starting May 10, 2024.
Popular cryptocurrency exchange Kraken plans to delist Monero (XMR) as the European Union puts regulatory pressure on privacy coins.
Kraken users said: Remaining XMR balances will be automatically converted to Bitcoin (BTC) on June 10, 2024, as the EU's Market for Crypto Assets (MiCA) regulation gradually takes effect.
Kraken removes Monero from list
From May 10, 2024 all XMR trading and deposits have been suspended and users are urged to close all margin positions before then. Otherwise, it will be automatically closed. Starting June 10, 2024, XMR will be officially delisted from exchanges.
Kraken's decision follows that of a number of other centralized exchanges (CEX) that have similarly removed privacy coins from European users in recent months. This includes cryptocurrencies with privacy features such as Binance and OKX, which delisted Monero, Zcash (ZEC), and Dash (DASH).
This comes as the broader MiCA Cryptocurrency Regulations come into force this year, with Anti-Money Laundering Regulations (AMLR) and illicit financing rules that could ban all coins that promote anonymity. It's a thing.
MiCA effect
The EU's new AMLR regulations prohibit crypto asset service providers (CASPs) from offering privacy coin accounts. The rules await formal approval by the European Parliament and the Council of the EU this month and are expected to come into force three years after their publication.
MiCA, which took effect in June 2023, already prohibits tokens with anonymization features, but three amendments to the AMLR rules will further strengthen these restrictions.
First, crypto mixers are banned. These are tools that allow users to deposit cryptocurrencies and “blend” them with other cryptocurrencies, making them difficult to trace. Second, the EU intends to strengthen the tracking of virtual currency remittances, allowing transactions to be regulated and monitored. Finally, self-custodial wallets impose payment limits and limit anonymity.
Will decentralization become popular?
Privacy advocates and Monero supporters say this could certainly be a positive for cryptocurrencies, as privacy tokens never really “belong” to a CEX platform linked to the traditional financial system. I emphasized that right away.
Perhaps privacy coins were always destined to be “banned” by regulators and removed from centralized systems, but decentralized exchanges (DEXs) and other peer-to-peer (P2P) platforms always will, so their use Efforts to suppress it may be in vain. It will be available to anyone who wants it.
Instead, one could argue that MiCA regulations are so invasive and violate privacy rights that users will seek anonymization tools and cryptocurrencies. Many countries, such as China, have attempted to ban cryptocurrencies outright, but this has proven impossible.
Unless MiCA makes it illegal for individuals to use Privacy Coin, users could flood into Privacy Coin after the full implementation of MiCA, which is expected to take effect by December 2024.
Was this article helpful?
