- Soon after the European Union signed the Markets in Crypto Assets (MiCA) regulation this week, Binance decides to delist 12 privacy coins in certain jurisdictions.
- Binance’s decision to impose trading restrictions on privacy coins has been met with disagreement from affected entities.
Crypto exchange Binance is taking action against privacy and anonymity-driven cryptocurrencies as it plans to impose trading restrictions on them, in some parts of the world. The move comes at a time when the exchange has been facing strong regulatory headwinds in top jurisdictions such as the US amid heavy regulatory action.
In its recent email to all of its customers in France, Italy, Poland, and Spain, crypto exchange Binance cited the local regulatory requirements as the reason behind this decision against privacy coins.
In its email, Binance has named 12 privacy coins that would be no longer available for trading. This includes Dash (DASH), Decred (DCR), Zcash (ZEC), Monero (XMR), Horizon (ZEN), PIVX, Firo (FIRO), BEAM, MobileCoin (MOB), PIVX, Navcoin (NAV), Secret (SCRT), and Verge (XVG).
Earlier this week on Wednesday, the European Union formally signed the Markets in Crypto Assets (MiCA) regulation making it into law. Article 68 of the MiCA law notes that trading platforms shouldn’t allow crypto assets to have an inbuilt anonymization function unless the holders of these tokens, as well as their transaction history, are easily identifiable via authorized service providers. The MiCA laws will come into effect soon after being published in the EU’s official journal later this month.
With MiCA, the EU has been pushing enough to bring regulatory clarity to the rapidly emerging crypto space. While most industry players have welcomed this move from the EU, some have also asked for further clarity.
Companies Behind Privacy Coins Respond
Several entities affected by Binance’s delisting of privacy coins have expressed their disagreement with the decision. Secret Network, for instance, clarified that its native token SCRT is not categorized as a “privacy coin,” but rather as a platform facilitating the development of decentralized applications that prioritize data protection.
In a message on Twitter, Secret Network said: “It’s one of the only blockchains that can support GDPR-type regulations. We’ve clarified this to Binance, and their team is re-evaluating making SCRT available to EU users”.
Electric Coin Co, the company behind ZCash also suggested that Binance’s delisting of certain privacy coins poses a “direct and imminent threat to the privacy and security of individuals, families, businesses, communities, and entire nations”. In further questioning of the MiCA rules, the company noted:
MiCA language is vague and could apply to a wide range of companies, decentralized organizations, cryptocurrencies, and applications. What is a “crypto-asset service provider,” for example? Does Bitcoin have an “inbuilt anonymisation function”?
This makes it all the more disappointing that Binance made its choice to kill a consumer’s right to privacy. To our knowledge, Zcash complies with all other laws and regulations in the EU — including the so-called Travel Rule and the Fifth Anti-Money Laundering Directive.