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Monero Users’ XMR to Be Converted to BTC as Privacy Coins Shunned in Europe

Last Updated April 12, 2024 1:30 PM
Eddie Mitchell
Last Updated April 12, 2024 1:30 PM
Key Takeaways
  • Privacy coins are under pressure in Europe as new regulations come into effect.
  • New rules could see bans and restrictions on crypto blenders and self-hosted wallets.
  • XMR trading and deposits will cease for users in Ireland and Belgium from May 10, 2024.

Kraken, a popular crypto exchange, is set to delist Monero (XMR) as the European Union (EU) applies regulatory pressure on privacy coins.

Kraken users have been told  that any remaining XMR balances are to be automatically converted into Bitcoin (BTC) on June 10, 2024 as the EU’s Market in Crypto-Assets (MiCA) regulations slowly come into force.

Kraken Delists Monero

From May 10, 2024 , all trading and deposits for XMR will be halted, and users have been urged to close all margin positions by then. Otherwise, they will be closed automatically. From June 10, 2024, XMR will be officially delisted from the exchange.

Kraken’s decision follows that of numerous other centralized exchanges (CEXs) that also removed privacy coins from their European users in recent months. This includes Binance and OKX, who delisted Monero, Zcash (ZEC), as well as cryptos with privacy features such as Dash (DASH).

This comes as the sweeping MiCA crypto regulations enter into force this year, with its Anti-Money Laundering Regulation (AMLR) and illicit financing rules set to potentially ban all coins that enhance anonymity.

The MiCA Effect

The EU’s new AMLR rules prohibit crypto-asset service providers (CASPs) from providing accounts for privacy coins. These rules are pending formal approval in the European Parliament and Council of the EU this month, and will be enacted into force three years following its publication.

MiCA, which came into force in June 2023, already bans tokens with built-in anonymization, but three amendments to the AMLR rules will further tighten these restrictions.

Firstly, there will be a ban on crypto mixers. These are tools where users deposit their crypto and ‘blend’ them with others, making them harder to trace. Secondly, the EU intends to enhance its crypto transfer tracking so it can regulate and monitor transactions. Finally, self-custody wallets will have payment restrictions placed on them, limiting their anonymity.

Decentralization Prevails?

Privacy advocates and Monero loyalists were quick to highlight that this may indeed be a positive thing for crypto, as privacy tokens never truly ‘belonged’ on CEX platforms that are linked to legacy financial systems.

Perhaps privacy coins were always destined to be ‘banned’ by regulators and forced off of centralized systems, however efforts to curb their use may be in vain, as decentralized exchanges (DEXs) and other peer-to-peer (P2P) platforms will always be available to those who are seeking them.

If anything, it could be argued that the MiCA regulations are too invasive and breach privacy rights, which will, therefore, spur users to seek out anonymizing tools and cryptos. Many nations such as China, have attempted to outright ban cryptocurrencies altogether, only to discover that they can’t.

For as long as MiCA doesn’t make it illegal for an individual to use privacy coins, users may flock to them following the full implementation of MiCA, which is expected to come into effect by December 2024.

 

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