BitBay, a Polish cryptocurrency exchange with around $20.7 million in daily trading volume, has recently announced its plans to delist Monero due to its privacy features, an issue that has befallen Dash in the past.
BitBay will drop support for privacy-centric cryptocurrency Monero over money laundering concerns https://t.co/x9954IN85C
— Cointelegraph (@Cointelegraph) November 26, 2019
The decision was announced on November 25th and the delisting will take place on February 19th, 2020 to allow time for the the upcoming Monero blockchain fork. In order to facilitate the fork, BitBay will stop trading for Monero between November 29th and December 5th. After which, trading will be allowed until February 19th and all XMR will have to be withdrawn by May 20th 2020.
The exchange specifically cited Monero’s privacy features as reasons for the delisting and how “Monero (and other cryptocurrencies with this specification) has been already delisted on other fiat-crypto exchanges for the same reason”. The exchange’s announcement also added that “[a]s a licenced exchange, BitBay has to follow the market standards”.
“Monero (XMR) can selectively utilize anonymity features among projects. This feature of XMR is a subject to end of transaction support. The decision was made to block the possibility of money laundering and inflow from external networks.”
Growing trend to delist privacy-centric coins
As BitBay mentioned, there has been a growing trend among exchanges to delist coins that have significant privacy-enhancing features as there is increasing regulatory pressure surrounding these coins. There has been increasing regulatory attention ever since the last major cryptocurrency market price spike, but there has been significantly more attention pointed towards privacy-centric coins since regulators are fearful that this will help would-be criminals launder money.
The Financial Action Task Force, a multinational task force charged with combating money laundering and financing of terrorism, is leading this movement with new guidelines that they “recommend” countries adopt and at the risk of being blacklisted by the organization if they choose to ignore. One of their more ardent rules related to privacy coins is the “travel rule” that “recommends that exchanges be able to collect relevant information such as the name and address of the sender and recipient of the virtual asset”. This has caused exchanges like OKEx, BitOasis, and others to delist coins that have privacy features in addition to the recent BitBay delisting.
Dash’s mixed results in winning the delisting battle
While adopting a fundamentally different privacy model more similar to Bitcoin, Dash has nonetheless been grouped with Monero by some regulators and exchanges. Dash offers its users optional privacy via PrivateSend, which fundamentally is no different than sending Bitcoin through CoinJoin mixers. As such Dash shouldn’t be classified in the same delisting group as Monero, but nevertheless it has been repeatedly. However, Dash Core Group has been able to engage with exchanges and regulators on this issue, leading to the reversal of a delisting planed for a UK exchange and temporary pause the OKEx Dash delisting while details are discussed further. This model being pioneered by Dash not only provides a path forward on how the cryptocurrency community can deal with fallout from regulators, but also with how to maintain privacy without requiring a hard stance against regulators.