Crypto Exchange Huobi Will Remove 7 Privacy Pieces, Citing New Financial Regulations

Seychelles-based cryptocurrency exchange Huobi has announced that it will remove seven privacy coins, citing new financial regulations. The company says it has to consider the laws and compliance policies of the more than 100 countries it serves, but some analysts believe the main driver for the move is a planned entry into the US market.

Monero, other non-crypto exchange privacy coins as Huobi eyes expansion

Along with ditching the popular Monero, Huobi is completely removing six other privacy coins: Dash, Decred, Firo, Horizen, Verge, and ZCash. Trading in these privacy coins ended on September 6 and new deposits ended on September 12. Remaining orders that have not been closed at the time of cancellation will be automatically canceled and credited to users’ spot accounts.

A terse Huobi statement released on Sept. 11 vaguely alluded to “new financial regulations” without going into detail, and also cited Rule 17(16) of the Huobi Global Token Management Rules. Privacy coins like Monero add additional layers of anonymity to transactions, preventing third parties from seeing the movement of funds between wallet addresses, as can be done with Bitcoin and other more standard tokens.

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Existing financial regulations generally focus on the use of private coins in criminal transactions, including ransomware payments, money laundering, and terrorist financing. Several countries, including Australia, Japan, and South Korea, have banned them outright and will not allow crypto exchanges based in the country to offer them. Confidential coins are not yet banned in the United States, but the regulatory mood appears to be moving in that direction after recommendations from the Secret Service and other government officials asking Congress to get involved with them. And in other countries, like the UK, financial market regulators have issued guidelines encouraging crypto exchanges to drop them.

Given this climate, major US exchanges such as Coinbase and Binance have voluntarily forwarded privacy coins despite not being legally required to do so. Law enforcement in the United States has been able to track and “recover” some ransomware payments made via Bitcoin via Coinbase and other exchanges, including in the case of the 2021 Colonial Pipeline attack, which has helped contribute to political tolerance of cryptocurrencies that have public ledgers.

Some believe that Huobi made the move as part of its US expansion plans. The crypto exchange obtained a Money Services Business (MSB) license from the US Financial Crimes Enforcement Network (FinCEN) in July this year, a necessary first step to providing fiat currency exchange services in the country. However, the company has other hurdles to clear before it can set up shop in the United States, primarily obtaining a money transfer license. Huobi was essentially pushed towards Western expansion when its mostly Chinese user base dwindled after cryptocurrency was banned there in September 2021; the group is also pursuing similar licenses in New Zealand, the British Virgin Islands and the United Arab Emirates.

Could financial regulation put an end to private coins?

Governments of most major countries in the world have made it clear that they would prefer not to deal with private coins, seeing no real advantage in instant global transactions which are very difficult to track and offer the possibility of keeping the currency. money out of the hands of the taxman. But privacy advocates insist that this layer of anonymity has necessary applications, such as security for those processing large, legitimate transactions and for those donating to political causes, and such considerations ( as well as potential backlash) have kept the bans isolated in sporadic countries to this day. .

The government’s approach may be to simply pressure exchanges to voluntarily drop privacy coins, which seems to work and in which financial regulation plays an important role. But ultimately, many market analysts believe lawmakers will need to consider legitimate uses of privacy. coins and integrate them into financial regulations; there’s also the fact that numerous recent reports reveal that only around 1% of all crypto transactions are criminal in nature (although that number increases dramatically for some individual privacy coins), making it an unreliable boogeyman for adopting otherwise unpopular new rules. Criminals also continue to demand Bitcoin ransoms at just over double the rate at which they demand Monero, which is generally considered the most anonymous option (but also often not easily accessible to their victims).

#Crypto exchange Huobi announced that it will remove 7 coins from #privacy, citing new #financialregulations. Some analysts believe that the main motivation for this decision is a planned entry into the US market. #respectdataClick to tweet

The issue of private coins and financial regulations is linked to recent actions against coin mixers, another tool widely used by digital criminals to cover their tracks, but which also has legitimate applications not served by others. means. Recent US sanctions issued against Tornado Cash and other services are being challenged in court by Coinbase and other parties, primarily over concerns that such a move could set a legal precedent to sanction software and tools rather than individuals. and organizations.

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Crypto Exchange Huobi Will Remove 7 Privacy Pieces, Citing New Financial Regulations

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