With the announcement of the FATF guidance rules earlier this year privacy coins seem to be suffering as a result. Coinbase UK dropped Zcash, OKEx delisted five privacy coins as did Upbit.
Monero, Zcash and Dash are all valued at under half of their July prices.
Does this mean the end of all privacy for crypto?
One company in particular CipherTrace is working with exchanges to validate transaction data without having to actually share data itself which helps with the FATF travel rule. This will offer some degree of assurance but true anonymity may not thrive. What are your thoughts?
https://cryptobriefing.com/privacy-coins-zcash-dash-scrutiny/Dash has an open blockchain with public viewable addresses of senders and receivers and publicly viewable amounts,
just like Bitcoin (Dash is even a fork of Bitcoin). This means Dash can comply with this travel rule and the FATF ruling
in general, to the same extend as Bitcoin can.
Both Bitcoin and Dash use optional coin mixing on their network through CoinJoin. With Bitcoin this happens through several wallets
that support CoinJoin mixing and consists of 4% usage on its network. With Dash this optional CoinJoin mixing is called PrivateSend
and consists of less then 1% usage on its network.
Link :
https://bitcoinmagazine.com/articles/percentage-coinjoin-bitcoin-transactions-triples-over-past-year Link :
https://dashradar.com/charts/privatesend-transactions-per-daySince Dash and Bitcoin are both open blockchains and Dash is a fork of Bitcoin and they both use optional CoinJoin mixing on their
network (Bitcoin more then Dash), there is no legal difference between Dash and Bitcoin and therefore Dash should be treated the
same as Bitcoin by exchanges (most exchanges indeed do treat Dash the same as Bitcoin). This is most likely why Dash is getting
listed on a daily basis on exchanges like Coinbase, Coinbase Pro, Binance US, Vaultoro, Bibox and many others. These exchanges
would not have integrated Dash very recentely, if they thought Dash could not comply with these FATF recommendations.
Here is some additional information about the FATF ruling, that i recentely posted in the Dash ANN thread and could be of interest
on this topic :
The FATF is specifically calling them "virtual assets" and it includes anything crypto related, ranging from crypto exchanges to
custodial wallet providers to all cryptocurrencies. These "virtual assets" needs to comply with FATF recommendations, including
this "travel rule" which goes beyond the basic KYC rules, which mostly involves the verifying and keeping records of their own
users’ identities and operations. The travel rule aims at something else :
* to capture any VA transfer above 1.000 USD in the cross-border wire-transfer framework**
* to oblige all VASPs to get and to pass their customer’s information to each other when transferring funds and to take freezing actions
and prohibiting suspicious transactions just as banks or other financial entity are required to do
This could become problematic for exchanges, when they have cryptocurrencies listed that have :
* shielded amounts (means no capturing of any VA transfer above 1000 USD in that cross-border wire-transfer framework**)
* shielded addresses (so no public knowledge about who is sending and who is receiving those transactions)
** i assume this also relates to crypto transactions with above 1000 USD value, circulating on crypto frameworks
I'm not sure if exchanges found a workaround for this or not (i'm not sure if CipherTrace open source solution named TRISTA works on
shielded addresses and amounts). Dash does not have shielded addresses or shielded amounts and can therefore just like Bitcoin more
easily comply with this travel rule, but other cryptocurrencies like Monero and Zcash do have shielded addresses, shielded amounts or both
active on their blockchain (either by default active or optionally active).
So i consider KYC rules and FATF ruling (including travel rule) two separate level of requirements, where KYC is mandatory i believe
and FATF ruling recommandations are not mandatory, but FATF could punish a country by blocking its access to the global payment network.
(not very likely that this will ever happen, but still).
We will just have to see if this travel rule survives in its current form or if it gets adjusted next year after a year long review (june 2020)
by the FATF. Because this travel rule does not fit as easily with the crypto world (and introduces some serious privacy issues), while it does
fit more naturally with the global banking world (where its primarily designed for).