Privacy-focused altcoin projects are disliked by regulators as they facilitate money laundering. Many regulators have taken or are preparing to take prohibitive steps towards such coins. Allegedly, the European Union will now take action against these coins. Here are the details…
European Union targets privacy altcoin projects
Allegedly, the European Union expanded money laundering measures with Russia’s attempt to invade Ukraine. Therefore, their focus has shifted to privacy coins as well. According to the claims based on the leaked documents, the European Union is working on money laundering. In this context, it was planned to ban privacy coins after some studies carried out by Czech authorities. It is claimed that the draft containing this ban was sent to 26 member states.
Why are privacy coins getting the attention of regulators?
While cryptocurrency is a tool that can make money laundering easier, money laundering is more complex than it seems. Contrary to expectations, the person who wants to launder money does not touch cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH). In the financial world, money laundering refers to the transfer of cash from illegal activities to legitimate financial institutions. Criminals cannot directly deposit big money into banks or centralized fintech applications without triggering alarms. That’s why money launderers develop sophisticated transfer methods that make their cash appear to come from “clean” sources.
Criminals can use cryptocurrency to hide funds, but that doesn’t mean crypto assets are illegal in nature. Cryptocurrencies represent a new tool that money launderers can potentially use to fund illegal activities. Money launderers can convert cryptocurrencies into privacy coins to hide their operations. Cryptocurrencies like Monero and ZCash are deliberately difficult to track on the blockchain. In other words, these are the coins that the European Union points to.
Some examples of privacy coins
cryptocoin.com As we have also reported, privacy coins aim to anonymize all transaction data. You cannot view the transaction history on a privacy coin’s blockchain as you can on Bitcoin’s ledger. While privacy coins are transferred between wallets like other cryptocurrencies, outside observers cannot tell where they are going. Monero (XMR) is the premier privacy coin. However, some currencies like ZCash, Dash, and Litecoin have optional privacy features.
These cryptocurrencies are favored in the criminal field as they are difficult to detect by regulators. According to a study from 2021, more hackers are only accepting XMR as a form of payment. Privacy coins aim to protect user privacy on the internet. But they have become controversial due to their association with money laundering. Most regulated exchanges like Gemini, FTX and Coinbase still do not offer coins like XMR.
You can see the top 30 privacy coins in the image below:
