To take the keys
- The European Union has announced plans to limit or ban the use of privacy coins in its jurisdiction.
- The thinking behind the potential ban is primarily related to money laundering.
- As on-chain surveillance becomes more sophisticated and lawmakers on both sides of the Atlantic become more vigilant, the case for cryptocurrencies to preserve privacy is becoming more apparent.
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The European Union is reportedly considering a ban on privacy coins including Monero (XMR), Zcash (ZEC) and Dash (DASH).
The leaked document
EU lawmakers are working on an anti-money laundering policy proposal that would ban banks and crypto providers from interacting with privacy coins, according to an anonymous EU diplomat. CoinDesk.
At launch, the policy would blacklist a number of popular cryptocurrencies, including Monero (XMR), Zcash (ZEC) and Dash (DASH).
In March, the European Parliament sent legislation to prevent transactions between exchanges and hosted wallets. The the parliament now seems ready to increase restrictions against crypto anonymity.
In a draft bill dated November 9, he initially reported CoinDeskthe organization said: “Credit institutions, financial institutions and service providers of crypto-assets will be prohibited from keeping…anonymity-enhancing coins.”
The draft is believed to have been drawn up by Czech officials and has since been shared among 26 member states. As of yet, the privacy breach proposal has not yet been made official.
Having privacy issues?
at the beginning of the month Crypto Briefing he spoke Zcash CEO Josh Swihart to gain insight into the challenges and opportunities in the privacy coin industry. Swihart told us that public blockchains are a serious security risk for individual users and corporations.
“If I’m a business that accepts cryptocurrency by itself, not through a third-party intermediary, I can’t afford to let my competitors see all of that. [personal] information,” Swihart said. “Not just information about my business—what’s going in and what’s going out—but information about my customers who may be transacting online or using cryptocurrency. So I hope there will be a tipping point where there will be a flood of demand.”
Swihart expects the demand for privacy coins to become increasingly urgent because “now you have crypto-surveillance companies, Chainalysis and others, that are not only tracking transactions, but looking at flows, tagging addresses.”
Regulators and increasingly sophisticated on-chain surveillance are likely to catalyze increased demand for privacy coins. Ironically, regulators can defend privacy coins rather than kill them.
That’s a lesson that could apply equally to US regulators. The ultimate blacklist Tornado Cash The US Treasury Department’s Office of Foreign Assets Control (OFAC) is an example.
“There’s a healthy concern about the direction the regulatory talks have gone,” Swihart told us. “I think what OFAC did was a massive overreach.”
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.