Binance will not delist privacy coins in Europe, opting instead to review its classification of assets in line with EU law.
Binance has reviewed its decision to delist several privacy coins in Europe. The exchange will no longer delist these coins as it works to comply with regulations stipulated by European authorities.
Binance will now reclassify privacy coins to satisfy regulations. In a recent comment, Binance said:
“After carefully considering feedback from our community and several projects, we have revised how we classify privacy coins on our platform to comply with EU-wide regulatory requirements.”
Binance also noted that it must comply with regulations in several individual EU jurisdictions since it is registered in these places. The exchange said these jurisdictions have specific laws that expect Binance to “monitor transactions for coins listed on our platform.”
Binance Planned to Delist Multiple Privacy Coins in Europe
Last month, Binance announced it would suspend access to privacy coins, making them unavailable for trading in Poland, France, Spain, and Italy. At the time, Binance said at least a dozen coins would stop trading.
The exchange named Dash (DASH), Zcash (ZEC), BEAM, Verge (XVG), Monero (XMR), PIVX, and MobileCoin (MOB). Other named coins are Horizon (ZEN), Firo (FIRO), Decred (DCR), Navcoin (NAV), and Secret (SCRT). Binance said it took the decision “as part of Binance’s ongoing compliance processes.”
The Binance announcement met with some resistance. For instance, Guy Zyskind, the co-founder and CEO of Secret Labs, said Secret has tried to rectify what it considers a misclassification. Zyskind told Decrypt that only data contained in smart contracts are confidential, while transactions remain public. According to him, “Secret is much more appropriate for GDPR-type applications in the blockchain setting.”
Privacy coins provide users with a lot more anonymity than is ordinarily available. These coins obscure user transactions such that surveillance becomes nearly impossible. Consequently, authorities have become considerably averse to privacy coins as they believe these assets are easily used for money laundering and other illegal transactions.
The European Union and MiCA
In April, the EU passed the Markets in Crypto Assets (MiCA) bill to regulate the digital currency sector. The bill was first introduced in 2020 to provide much-needed clarity for Virtual Assets Service Providers (VASPs). While there are several arguments against MiCA, privacy coins may be more affected than other types of digital assets. For instance, MiCA would require exchanges to only support privacy coins if they verify user identities.
The EU Parliament voted 517-38 in favor of MiCA after multiple deliberations. For instance, Parliament postponed a final vote for the second time due to translation issues. A postponement in January followed a previous delay in November 2022 because the legal document had to be translated into all 24 official languages.
With MiCA, the EU has pioneered comprehensive crypto regulations and provided clarity that may be absent in other places like the US. Crypto firms in the US have been at loggerheads with authorities like the SEC for what many have described as a deliberate attempt to avoid providing clarity.