After announcing that it would be delisting a dozen privacy coins in several EU countries, it appears that Binance has made a comeback.
Seven privacy-focused tokens have been saved from a planned delisting on Monday, according to developers behind the cryptocurrencies Verge (XVG) and Secret (SCRT).
Binance ends trading in privacy coins in light of MiCA regulations
In May, Binance sent an email to customers in France, Italy, Spain and Poland. The message stated that it would stop offering trading services for twelve cryptocurrencies that allow anonymous transactions. Major privacy coins such as Monero, Dash and Zcash were affected. Lesser-known tokens, including XVG and SCRT, would also be delisted.
The decision followed the European Union’s approval of the Markets in Crypto Assets (MiCA) regulations.
Significantly, MiCA is imposing the ‘travel rule’ on crypto transactions. It therefore raises the prospect that companies facilitating the trade in privacy coins will fall foul of EU law.
The travel rule requires crypto asset service providers to collect certain information about the sender and recipient of crypto transfers. However, this requirement goes against the basic ethos of privacy-enhancing coins like Monero. From the beginning, enabling anonymous transactions was the main purpose of such tokens.
Binance’s decision to end support for such cryptocurrencies is just the latest blow to privacy coin advocates in Europe. Previously, major exchanges, including Kraken, Huobi and Bittrex, had already delisted Monero and Dash.
Elsewhere, authorities in Dubai, Japan and South Korea, among others, have been clearer about their crackdown on anonymity-enhancing cryptocurrencies. There, governments have taken steps to completely ban privacy coins, explicitly banning their trading and issuance.
Seven tokens saved from removal
Binance initially said it would stop trading all affected tokens starting June 26. But this week, the teams behind Verge and Secret reported that they had been saved from the delisting madness.
Thursday Verge declared that XVG would remain unaffected by Binance’s trading restrictions on privacy coins. Meanwhile, the secret network tweeted Friday that Binance will not delist SCRT in European countries.
In addition to XVG and SCRT, Decred (DCR), Navcoin (NAV), Zcash (ZEC), Dash (DASH) and PIVX will reportedly remain listed on the exchange.
Anonymous transactions versus private data
With Binance apparently reassessing the compliance risks of seven privacy-enhancing coins, important questions arise. Namely: what caused the U-turn? And why are some privacy coins considered acceptable while others are not?
One answer might be that the likes on Monero are privacy coins through and through. But other affected tokens offer a range of uses.
For example, while Monero has always been about enabling anonymous transactions, the Secret Network has recently emphasized SCRT’s function as a smart contract platform. In this light, the technology is less about hiding the trail of money. Instead, the secret network focuses on allowing users to store sensitive data on-chain.
But for proponents of the right to buy and use privacy coins, financial transaction data falls under the rubric of personal data. As such, they argue that transaction anonymization tools are just as important as other data protection tools.
From this perspective, Binance’s latest decision offers a glimmer of hope for the technology. In light of state surveillance, privacy advocates argue that such tokens help secure financial freedom.