- John McAfee warns that privacy coins such as Monero (XMR), Zcash (ZEC), DASH could soon be banned by governments, but this will be as ineffective as the laws against marijuana.
- A look at the possibilities for enforcement shows that a ban would be difficult to enforce.
Cyber security guru John McAfee is notorious in the crypto-scene for his predictions. The most famous of all predictions, which he has recently retracted, is certainly the bet that the Bitcoin price will rise to one million USD by the end of 2020. In recent months, however, McAfee has repeatedly referred to Bitcoin as “Shitcoin”, promoting Ethereum as the best smart contract solution and Monero as the best privacy coin.
His most recent prediction now once again refers to privacy coins in general. According to McAfee, governments around the world will soon take decisive action against the use of Monero (XMR), Zcash (ZEC), DASH and other privacy coins and ultimately ban them. At the same time, McAfee has assured that this attempt will have little success. He further stated that the laws will be as unsuccessful as the laws against marijuana. He also appealed to his followers to exercise their right to financial privacy:
Privacy coins and distributed exchanges will soon be outlawed. But these laws will have no more teeth than the ineffective laws against Marijuana.
Do not abdicate your rights! You have, absolutely, the right to financial privacy. Ignore unconstitutional laws.
Is a ban on privacy coins, like Monero, enforceable?
The question is very complex and cannot be answered with complete certainty. Nevertheless, it can be stated first of all that Monero (XMR), for example, is developed decentrally and by numerous anonymous persons. Therefore, at least the development is probably not endangered. However, as a core team member (“ArticMine”) via Reddit stated two years ago, there are other threats that can not ban Monero, but could “cripple it”.
What governments around the world could do is to influence the software policies of tech giants Microsoft and Apple. As ArticMine explained, the End User License Agreement (EULA) gives Microsoft the right to remove software from end user computers that Microsoft considers “malicious”, so that, for example, the US government could require Microsoft to remove Monero software from Windows computers.
The US government is a huge Microsoft customer so that alone gives them a lot of leverage with Microsoft. By using the “voluntary” approach this would avoid the legal constitutional challenge that a direct ban would surely bring. This was the approach that the US government used to nearly cripple Wikileaks by asking a handful of banks. PayPal etc to create a financial blockade.
The second approach, according to ArticMine, is to use Digital Rights Management (DRM) in Windows to spread malware.
For example the North Korean Government, they have very advanced cyber warfare capabilities, could leverage this DRM to steal large amounts of Monero from Windows users. They could then dump the stolen Monero onto the market thereby crashing the price.
In the two examples above, a government uses the centralized control of companies like Microsoft, Apple, or even Google. However, there are also, more obvious scenarios. Similar to Initial Coin Offerings (ICOs), government agencies could issue a directive, not even a law, which would always first link privacy coins to money laundering or drug trafficking.
This could force exchanges to remove Monero, Zcash and Co. from their platforms, thereby eliminating an important access point. This has already happened in countries like Japan. Although Monero is not banned in this scenario, its use and acceptance could suffer greatly. However, a ban in the strict sense of the word seems difficult to enforce.
Privacy coins such as Monero would then undoubtedly continue to have a right to exist. As an official of the European Cybercrime Centre (EC3), which belongs to Europol, confirmed in a webinar at the end of last year, Monero transactions are not traceable. Enforcing the ban would therefore also be a nightmare for the law enforcement agencies involved.