Japanese Exchanges Could be Forced to Delist Privacy-Focused Cryptocurrencies

News and Analysis

Japan’s Financial Services Agency (FSA) is ‘quietly’ pressuring local cryptocurrency exchanges to delist privacy-focused altcoins such as Monero, Zcash, and Dash.

As Forbes reports Monday, April 30, sources close to the FSA confirmed that they were taking all available steps to discourage the use of certain virtual currencies that have become attractive to the underworld because they are difficult to track.

According to the Japanese authorities, it is very difficult, if not impossible, to identify the recipients of anonymity-oriented coins via public ledgers, and that this kind of anonymity makes them ideal for money laundering.

“It should be seriously discussed as to whether any registered cryptocurrency exchange should be allowed to use such currencies,” a unnamed member of an FSA-sponsored cryptocurrency working group reportedly said in a meeting on April 10.

The FSA is particularly adverse to Monero, especially after it was reported earlier this year that North Korea may be mining the currency to raise funds.

Currently, Monero, Zcash, and Dash can be legally exchanged in Japan but there is a possibility that in the future trading in the currencies could be banned. However, in March Coincheck dropped transactions in all three cryptocurrencies with reports suggesting this was part of the company’s attempt to show better compliance standards after the January 26 hack of the exchange.

Neither Coincheck nor Monex, a Japanese brokerage which acquired the exchange earlier this month, has yet commented on why they dropped handling the three cryptocurrencies.

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