- Kraken has delisted Monero following Europe’s regulatory push
- The exchange said that new regulations meant that it had “no choice but to delist Monero”
- Privacy coins have been on a death march for years
Crypto OG exchange Kraken has added another dagger to the heart of the privacy coin with the announcement that it has delisted Monero (XMR) in Europe. The company announced yesterday that new regulations in the European Economic Area (EEA) have left it with “no choice” but to remove the coin from its listings, citing “alignment with applicable regulatory and compliance obligations.” This news will not come as a surprise to many observers, however, who have been watching the death of the privacy coin in real time since their heyday in 2017.
An Inescapable Tidal Wave
Privacy-focused cryptocurrencies like Monero (XMR) and Zcash (ZEC) were immensely popular in the earlier Wild West days of the crypto markets, with authorities unable to trace them, making them perfect for illegal use. However, as regulatory pressures have tightened around the globe, privacy coins have become seen for what they really are. This heightened focus has led to outright bans in several countries and restrictions that are slowly pushing these coins out of circulation.
Countries like Japan and South Korea have led the charge in banning privacy coins. Japan, one of the world’s largest cryptocurrency markets, banned Monero, Zcash, and Dash in 2018, citing concerns about their use in illegal activities such as money laundering and drug trafficking. South Korea followed suit by delisting privacy coins from cryptocurrency exchanges, aiming to strengthen anti-money laundering (AML) efforts.
Europe Catching Up to Asia
More recently, exchanges in the United States and Europe have also started delisting privacy coins due to mounting regulatory pressure from agencies like the Financial Action Task Force (FATF). The FATF’s “Travel Rule,” which requires financial institutions to share customer information, has been a significant blow to privacy coins. Since privacy coins are designed to mask both the sender and receiver in a transaction, they inherently conflict with regulations requiring transparency and traceability. This has made it difficult for cryptocurrency exchanges to offer them without risking penalties or violating AML laws.
It is these rules that have seen Kraken take the action it has, with a message posted to its website announcing the delisting:
As one of the world’s largest cryptocurrency platforms, we are constantly working to support the most comprehensive set of digital assets possible in alignment with applicable regulatory and compliance obligations. After thorough consideration, and exploration of all viable alternatives, we concluded we have no choice but to delist Monero (XMR) in the European Economic Area (EEA) due to regulatory changes.
Kraken added that it “did not take this decision lightly,” with former Monero maintainer Riccardo Spagni commenting on the move:
Kraken delisting Monero in Europe just goes to prove what we already know: Chainalysis et. al. simply can’t squeeze enough information out of Monero’s privacy to be meaningful, otherwise regulators would want Monero to stay listed as a honeypot.https://t.co/qUpV9oLl8Z
— Riccardo Spagni (@fluffypony) October 1, 2024
Whatever the true reasons, and whatever the feeling among the crypto masses, the fact is that governments were never going to allow such coins to flourish, given their anonymity. The actions of exchanges, sparked by mounting regulatory barriers, has led to a decline in their adoption and availability, signaling a grim outlook for privacy-focused cryptocurrencies in the regulated global financial landscape.
