Binance Threatens Delisting of 10 Privacy Coins, Including Monero and Zcash Amid Regulatory Crackdown

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On Thursday, Binance warned it may soon delist 10 prominent privacy coins, including Monero, Zcash, and Horizen due to regulatory concerns.

In a statement, Binance said these tokens received a “monitoring tag” and could fail to meet listing requirements related to team commitment, network security, trading volume, and other factors.

“Tokens with the Monitoring Tag exhibit notably higher volatility and risks compared to other listed tokens. These tokens are closely monitored, with regular reviews conducted,” Binance stated. “Keep in mind that tokens with the Monitoring Tag are at risk of no longer meeting our listing criteria and being delisted from the platform.”

The announcement immediately impacted prices, with Monero falling 5% and Zcash 12% in the past day according to CMC data.

Regulators Raise Concerns Over Privacy Coins’ Anonymity

Privacy coins allow users to conceal wallet balances, transaction details, and other information. This has attracted scrutiny from global regulators worried about potential illicit usage.

Last year, Binance said it would remove privacy coins in order to comply with European laws. Critics suggested the latest warnings are tied to ongoing high regulatory attention.

Binance now requires traders of these tokens to pass periodic quizzes on risks, a move some view as another attempt to discourage usage due to compliance pressures.

“The monitoring tag has been placed on FIRO along with other privacy coins due to increased regulatory pressure, including from MiCA, recent initiatives from U.S. regulators and compliance to Binance’s settlement with the U.S. DoJ,” Firo co-founder Reuben Yap said in an interview with The Block.

Loss of Exchange Access Harms Liquidity and Discoverability

Last week, rival exchange OKX also revealed plans to delist major privacy coins Zcash and Monero by January 5. OKX said these assets no longer align with listing standards.

Centralized exchanges are increasingly limiting or removing privacy tokens, but there are still options for users wishing to trade them.

Decentralized platforms like Uniswap allow access with no KYC requirements. Bisq and LocalMonero operate without controlling user funds. Volumes on these platforms remain far below larger centralized exchanges, however.

Advocates Clash With Regulations on Anonymity

Privacy coin proponents such as the American Civil Liberties Union argue that financial anonymity is a human right, providing protection from surveillance, identity theft, and other risks.

It's essential for Binance to recognize the significance of privacy coins. Privacy is a fundamental right, and crypto should uphold it.

— Mccoy Lucila (@LucilaMcco49087) December 31, 2023

The SEC asserted that lack of transparency inherently enables crime, however. Authorities have flagged privacy coins in several high-profile cases involving ransomware, theft, illegal drug sales, and terror financing.

In 2023, the IRS criminal investigation division offered a reward of up to $625,000 for tools to analyze privacy coin transactions and trace owners.

Finding the appropriate balance between individual privacy and law enforcement access is continuing to stir debate within the community.

Whatever the ultimate outcome, the regulatory tide may be turning against anonymous cryptocurrencies, at least when it comes to availability on prominent centralized trading platforms like Binance and OKX.

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