There has been a lot of news circulating in recent days, which Binance later confirmed, about high-privacy crypto assets such as Monero.
In fact, many users in certain countries received messages from the exchange warning that trading would be suspended.
The news was later also confirmed by Binance, which wrote on its official website that due to regulatory requirements from some local authorities, users who used certain payment channels to deposit fiat currencies would no longer be allowed to trade privacy coins.
Binance: the delisting of the Monero crypto
The official website does not say in which countries the trading pairs inherent to privacy coins on Binance will be rendered unusable, but for now it is known that there are at least four European countries where the delisting will become operational soon.
These are France, Italy, Poland and Spain.
Many users of the exchange residing in these countries have already received the official notice, which should reach everyone in the coming days.
The day of the possible delisting is 23 June 2023, although the date does not yet seem final for all four countries.
The delisting will affect twelve privacy coins: Monero (XMR), Zcash (ZEC), Dash (DASH), Verge (XVG), Beam (BEAM), Decred (DCR), Secret (SCRT), Horizen (ZEN), MobileCoin (MOB), Navcoin (NAV), Firo (FIRO), and PIVX (PIVX).
Trading pairs with these tokens will not be removed from the exchange, but made operational to those users found to be residents of the countries to which this restriction has been applied. Others will be able to continue to trade them.
Users who will no longer be able to trade them will still be able to withdraw their tokens to send them to a proprietary wallet or another exchange, for example.
The reasons for the delisting
The problem with privacy coins is their very poor traceability.
Truth be told, these were created by considering the lack of traceability to be a feature, and not a problem, but that feature becomes a problem when there are stringent rules on KYC and AML.
In fact, a great many countries oblige centralized crypto exchanges to perform KYC (Know Your Customer), or customer identity recognition and verification.
If this were the only problem, privacy coins could be exchanged without problems, but since they are high-privacy crypto assets that obfuscate some transaction data, including the sender in particular, they are effectively untraceable, or at any rate traceable only in some cases and with extreme difficulty.
As such, when a user receives privacy coins on the wallet of a centralized exchange, the exchange has an extreme difficulty in verifying that all rules, specifically related to AML, have been complied with.
The AML (Anti Money Laundering) rules require exchanges to verify that there is no serious suspicion that the funds they receive are from illicit or money laundering activities.
These are also supplemented by rules against terrorist financing, which follow similar procedures.
In these cases the exchange is required to verify the source of the funds, and with privacy coins this can be impossible or otherwise too difficult.
These reasons prompted Binance to choose to delist privacy coins in those countries where regulations in this regard are more stringent, or where it is not convenient for it to invest large resources to try to remain compliant with regulations.
Crypto Monero (XMR) price trends
The most famous privacy crypto is Monero, partly because it was probably the first. However, it contends with Zcash as the most widely used one.
XMR’s price trend is actually far from good.
Not only is it losing nearly 2% today, but the current price is even similar to what it was at the end of 2022.
In other words, although it followed the growth of the crypto markets in early 2023, over the following months it lost everything it had gained.
The current price of $147 is only very slightly higher than the $146 price at the end of 2022, and is 71% lower than the all-time high of $517 touched in May 2021.
To be fair, this percentage decline is by no means among the highest, but it is the shortfall in 2023 that makes the sentiment bearish on the price of Monero.
It is worth noting that during the previous big bull run, the one in 2017, the price had risen all the way above $400, so the current one is far below what it was at the beginning of 2018.
It is worth noting that the market value of XMR tends to be somewhat more constant than that of other cryptocurrencies, perhaps precisely because of its continued use as the main privacy coin, along with Zcash.
Zcash’s price trend
However, if Monero capitalizes more than $2.7 billion, Zcash (ZEC) capitalizes less than a fifth, or just over $500 million.
Today it is losing almost 3%, and has lost as much as 14% since the beginning of the year.
So the pre-ZEC situation, price-wise, is even worse than that of Monero.
In fact, compared to the all-time high at the beginning of 2018 it loses more than 95%, and during the last big bull run it failed to make new highs.
The price of ZEC also tends to be less volatile than the long-term average, even though XMR is still more stable.