Over the past several months we’ve seen a handful of cryptocurrency exchanges delist privacy coins. “Delisting is one of the easiest responses for small, compliant cryptocurrency exchanges,” said Justin Ehrenhofer, a DV Chain Compliance Analyst and Monero Contributor. “They may not have the resources to properly communicate their risk mitigation strategies to regulators and banks.”
Additionally, said Ehrenhofer, delisting of small assets deeply impacts the viability of those assets, lowering their liquidity to a critical level. On the other hand, for established privacy coins like monero it just pushes users “to exchange in riskier, less-compliant jurisdictions.”
For Ehrenhofer, privacy-preserving cryptocurrency communities should work with compliance professionals to ensure they feel comfortable with the compliance programs they present to banks and regulators. If a cryptocurrency exchange’s survival doesn’t depend on it, it’s unlikely it will put in the compliance effort needed to support any coin that comes close to being in conflict with AML and KYC considerations.
He points to ComplyFirst as a company that has created resources to assist exchanges in explaining how they can support assets that may result in more complex compliance cases.
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