Topic: Are Privacy Coins under Scrutiny? (Read 289 times)

Absolutely. And I certainly do expect there to be even more scrutiny in the future.

I think that the important thing here to note is that real long term investors in these privacy coins really aren't that worried, as far as the few that I've talked to and the general sentiment on their forums. Especially XMR, they don't look at it as a speculative asset anyhow and discourage sudden price movements.

These longer term holders that constitute a lot of the demand for these coins aren't really concerned about the regulations, because they won't be affected as transactions on-chain can still flow smoothly. All that these regulations will do is discourage institutional investors from ever touching anonymous coins, that's all.

The only privacy coin that I would buy would be Grin. Because it is a coin with a nice community, created by a person that is pretty similiar to Satoshi, the first altcoin accepted by this forum, truly decentralized with brilliant technology.

Privacy coins will be eliminated from the market as soon as crypto currencies will get mass adopted. No government in the world will accept decentralised anonymous payments, because they are untrackable and are not bringing taxes payments.

It can also be done on Bitcoin through CoinJoin (usage has been increasing on Bitcoin network)

Link : https://bitcoinmagazine.com/articles/percentage-coinjoin-bitcoin-transactions-triples-over-past-year

It can also be done on FIAT currencies (has still largest usage).

If you really want to stop bribe, launder money and exchange illegal things then we should :

*  Delist Bitcoin because of CoinJoin
* Stop development of privacy features for Bitcoin (two BIP's focussed on privacy for Bitcoin have already been introduced by Bitcoin
   developers --> https://www.coindesk.com/new-bips-hint-at-upcoming-taproot-bitcoin-soft-fork)
* Stop development of privacy features for Ethereum --> https://www.coindesk.com/why-ethereums-privacy-matters-and-whats-being-built-to-support-it
* Stop development of privacy features for Litecoin --> https://cryptobriefing.com/litecoin-inches-towards-privacy-with-new-grin-dev/
* Stop development of privacy features for Ripple --> https://www.ripple.com/insights/going-beyond-blockchain-pt-2-ensuring-transaction-privacy/
* Delist all privacy coins
* Delist all FIAT currencies and close all banks
* Fall back person to person exchanging goods for goods, monitored by offial third party to prevent the exchange of illegal things

Here is an question : why is it okay for governments around the world to attack Facebook's Libra project out of concerns for privacy,
while those same governments put pressure on exchanges to delist certain privacy coins ? Sounds pretty hypocritical to me.  

No exchange would want to confront governments. Privacy coins can be used to bribe, launder money and exchange illegal things. Exchanges need to suck up a bit because they want regulation.

While these delists weaken the confidence of the weak ones, they also cause prices to fall. To me, the value with USD does not mean everything, this does not mean their end. The price with USD is the value that all of us find suitable for them with the measurable value. Even if the prices go to zero, 1MNR =1MNR.

and this is where decentralized exchanges come to play I think.

Privacy coins can be used without exchanges. so I don’t see how this will make all of such coins disappear. Ofcourse the delisting will affect the price of privacy coins negatively but I doubt it will bring the existence of the coins to end.     The real price will will probably be based on demands from non-exchange buyers/sellers

^ Yes, I noticed the numerous integrations as well and thought that it's probably another way for Dash to counter future delisting. With regards to the urgency of decoupling the privacy feature, I guess it will all boil down to whether these FATF member countries will enforce the travel rule. Time will tell.

Edit: Thanks for the article.

I'm not that close to the team, just been around a long time with Dash. What i do know is that they want to
extend the privacy option from their core wallets to mobile phone apps over time as well. They believe privacy
on transactions is important to keep offering optionally and i dont really see them decouple this feature from their
core wallets any time soon.

Also remember that Dash still get daily integrations on so many exchanges (Coinbase, Coinbase Pro, Bibox, Vaultoro,
Binance US, Cointrade and many others), that there is no real urgency to switch the privacy feature over to third party wallets.

Here is an interesting article : https://medium.com/coinmonks/which-crypto-becomes-the-new-payment-system-69f95b2d2ec3

^ Good to know more and more features are coming for Dash. Why can't they just drop the coinjoin feature and just allow thrid party wallets to do the mixing for them (just like with bitcoin)? I think that's where Dash will ultimately free itself from being labeled as privacy-centric coin. I don't know how close you are with the team but have they considered that?

Yes, i think Dash will able to free itself from the privacy-centric label as it receives more and more support for its
InstantSend technology by exchanges on either the deposits side or the withdrawel side. Creating trading opportunities.

Another aspect of Dash that is receiving regnonition is its development of ChainLocks that not only provides protection
against 51% attacks, but also make sure transactions that are locked by ChainLocks are fully secure, can not be doublespend
and are provided with a certainty that they will be included in a block. This is the direct reason why Coinbase Pro only
requires 2 confirmations on its Dash deposits, instead of the more exspected 6 confirmations.

This all plus having InstantSend active by default on 90% of its transactions without additional costs, strengthen Dash primary
use case as digital cash.

Dash is also changing into a decentralized platform, where additional services can be run on. Services like a decentralized API
that allows direct connecting of services / Dapps to its network. Or services like data-type driven smart contracts, where metadata
of Dapps can be stored on masternodes through DashDrive.

As all these new use cases come available to Dash, it will loose its label as privacy-centric coin, and will be viewed more
like a decentralized fast payment provider network. Optional privacy will still be supported (it has been made far more
efficient and faster over the years), but in the end that will only form a small portion of its many services i believe.      

I am aware that all altcoins dropped in price that's why I said "may have contributed".

In your honest opinion, will Dash be able to get out of the privacy-centric label regardless of how many uses its coinjoin?

Again, all altcoins dropped in price. Not just privacy coins.

Besides, Dash has ATH with mining hashrate and almost new ATH with number of active masternodes (longterm investors).

https://bitinfocharts.com/comparison/dash-hashrate.html
http://178.254.23.111/~pub/masternode_count.png

And Dash still offers optional privacy (although its not much used now or in the past). Dash is just trying to get out from under
the privacy-centric label, as its far more focussed on other features (providing instant, secure and low cost transactions through
InstantSend for example).

I don't think so but it's interesting to see some of the response of these coins marketed as privacy coins.

My takeaways from the posted article:


The backpedalling may have contributed also to the drop in prices. Those who got sold of the privacy features are selling now that the supposedly privacy coins were no longer private all of a sudden.

OKEx is not delisting anything, OKEx Korea is delisting. Two different exchanges.
 

All altcoins have seen massive price drops these past few years, not just the privacy coins.
Which means other (market) factors are at play here.

I think a lot of these market factors have to do with Bitcoin (speculation about Bitcoin ETF's, Bitcoin upcoming halving etc),
causing an outflow of investments from Altcoins to Bitcoin. Also the Altcoins never really escaped the bearmarket (neither has Bitcoin,
at the looks of it).

 

I think the problem here is not about common people seeing it as illegal but mainly because it was used to money laundering.
Not only privacy coin, but all cryptocurrencies are also under scrutiny to prevent any money laundering and crime.
The reason why they pressured the privacy coin more than others because it is extremely hard to detect compared to a non-privacy coin and mostly used to do that.
personally speaking, it does not affect the investors because privacy coin is used by them who are afraid of being detected or paranoid, for normal investors. They do not really care about that much.

Okex is the first to take action on these Privacy coins by delisting them, now we have this bad news, I wonder will much more bad news coming for Privacy coins, some of them have been in existance for several years, but I am very confident that majority of these exchanges will prefer to keep these Privacy coins, they represent the essence of anonymity and about Dex they will continue to exist, as many traders prefer to trade on Dex.

I am not surprised, many including government will go against privacy coins because of their capabilities, i am sure that if crime syndicates  start using privacy coins they will always get away with what ever they use it for and nobody will be able to trace or track them but this scrutiny of a thing won't last forever, privacy coins equals real power

The  fact  that we want our freedom does  not  we should  play  on our security.  Those  security coin is a threat  to  national  security.  Criminals  can used those  coins easy to  their activities. When you make  things  more  secret it  means  there  something bad  behind it.  We want transparency  so coin without transparency is not my favorite.

It's definitely a hit against privacy coins and the government has obvious reasons against that. One of the issues here is that people who have no idea of what crypto is, are always seeing crypto being used in illegal stuff which is also blocking us from having mass adoption. Though I think that there are still exchanges that are trading and you can still get it in alternative IEO's, even better since you always buy low and sell high.

All these rules by the government will affect the investors and their investments badly, it would only be a matter of how people show as how they use it.

Exchanges are focused on profit and they'll do whatever to please the authorities. That even goes true to the decentralized exchange. Though they are decentralized, they can be blocked by the ISP and make it difficult for users to access. Unless we come up with truly decentralized exchange, there's no future for privacy focused coins.

I don't think ending privacy coin would be that easy but yes this extra scrutiny is really hurting my investments. Almost all of my privacy-based coin price is going down.

Yes privacy coins are under scrutiny but at the end of the day, it won't matter what agency you throw at them. They are more powerful than any government. Once they are live and distributed across the globe, no task force on the planet could shut them down.

Cryptocurrency has always been under scrutiny from many governments, especially Bitcoin and privacy coins more than others. This is not the first time that privacy coins fall under the radar of governments. The silk road before was thriving and then the government began cracking down on them. But it was transactions using the privacy coin Monero that they were not able to track down. That was already a huge precedent of the government's distrust toward the potential uses of privacy coins.

You can always count on your government to mess up your money. But yeah, they are extremely concerned about terrorism funding, money laundering, and other issues, so they will likely do whatever they can to get rid of privacy coins. As a result, privacy coins will have to either obey the regulations, or be abandoned. Doesn't seem right, but criminals do tend to exploit them for their own purposes, unfortunately.

They are being scrutinized now because the gov't sees it as a medium of exchange for illegal activities. They worry about it because it could be abused but from the very beginning, many privacy coins has already been launched but they just didn't care at all and let all these years to pass before doing something.

Not really, no one can stop these privacy coins as long as there are users who prefer it.

I think you are late though, it has been under scrutiny for many years now and I think it has contributed to the massive price drop that we have in those privacy coins. If I'm not mistaken, South Korea and it's exchanges have delisted privacy coins since last year already. And I'm sure some exchanges as well have or will go through that delisting process because of government pressures. But it is interesting that Binance, of all the exchanges, just offered lending using privacy coins, so it's very interesting and bold move by CZ.

(https://www.newsbtc.com/2019/09/17/binance-teases-fatf-allows-lending-via-privacy-coins/)

Not OKEx but OKEx Korea, these are two different exchanges, with different listing of crypto assets, and of a different size.
Dash is still traded on OKEx, even with margin trading and i have not heard anything about any plans of OKEx to delist Dash.  

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-day

Since 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).

Yes, it's obvious that privacy coins are being scrutinized by the authorities. I was astonished to see OKEX delisting privacy coins, other exchanges have been doing that too recently. It's really a hard time for privacy coin holders since price keeps going down with FUD. Many just sell their coins at any price to avoid more loss.

I don't think that just because some centralized exchanges are not allowed to deal with privacy cryptos it that it would mean end of privacy in crypto. Just like it's impossible to stop bitcoin, it's next to impossible to stop privacy coins if there are users and need for the tech. Governments can hurt them sure, and make the value drop by trying to ban them but there will always be use cases for them and there will be people seeing the value in them.

well, its a old news btw, and for me yes, its sad news for privacy coins.
however, there a 2 point regarding that statement.
first, there indirectly, the government began to think not to ignore crypto from all side. and that its a good point for me.
second, well , then no true anatomy anymore for privacy coins.
and i believe someday, all of crypto holder will be fully tracked by goverment.
yep, no more privacy,because in the end , goverment will treat crypto like gold.

The government want to able to trace transactions when the need arises, privacy coin could be making things difficult for them, they hate it when the privacy of the people is taken out of their control. Let's see how far this go.

That makes me a bit sad to hear. Governements can't outright make crypto illegal though can they?

Government are too paranoid when it comes to money laundering.  Sadly privacy coins encourage money launderer to use them in order to not be traced and government knows that.  That is the reason why they are creating regulations/laws that force exchanges to delist privacy coins. A tricky part on the government move to make these privacy coins to succumb to their will.  Anyway, when regulation intervene, there is no such privacy stuff ideals  they have to follow or be forgotten.



That too, will be regulated.  DEX are not fully decentralized since there is a group of people maintaining that. I believe it is just an exchange where you have your private key submitted. and remember you still have to send your token to the trading platform in order to trade them.

If exchanges choose to use CipherTrace's implementation that would mean that the identities would be in the hands of only a few people ie.

Granted if people have to do KYC through an exchange, they've already willingly gave their information. This just adds a level of protection.

I wonder what will happen over time to DEXs

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/