The South Korean subsidiary of a major cryptocurrency exchange OKEx announced plans to delist five major altcoins due to regulatory reasons. Starting Oct. 10, the exchange will stop providing support for Monero (XMR), Dash, Zcash (ZEC), Horizen (ZEN) and Super bitcoin (SBTC).
OKEx dropped the 5 cryptocurrencies because they prioritize privacy, making it harder to match the guidelines established by the Financial Action Task Force (FATF). More specifically, OKEx said the FATF’s “travel rule” recommendation to national regulators is the main reason for delisting the 5 cryptocurrencies.
Following the rules set out by FATF, OKEx notes that it is “recommended that exchanges be able to collect relevant information such as the name and address of the sender and recipient of the virtual asset.”
All five digital coins made collecting and reporting that information prohibitively complex, hence the exchange’s decision to delist them. OKEx said only the OKEx.co.kr branch will stop providing support for these cryptocurrencies, but that they will, however, will remain listed on its global platform.
FATF’s instructions say that if the value of the transaction exceeds $1,000, participating parties have to be identified. The new guidelines are a part of the plan to gain more control over cryptocurrency exchanges and the cryptocurrencies from being used in illicit activities and money laundering.
U.S. Secretary of the Treasury Steven Mnuchin said the point of the newly established guidelines is to oblige the cryptocurrency operators to follow the anti-money laundering (AML) and combat the financing of terrorism (CFT) protocols just like the traditional bodies.
“By adopting the standards and guidelines agreed to this week, the FATF will make sure that virtual asset service providers do not operate in the dark shadows. This will enable the emerging FinTech sector to stay one step ahead of rogue regimes and sympathizers of illicit causes searching for avenues to raise and transfer funds without detection,” said Mnuchin.
In theory, over 200 digital asset providers are supposed to match the guidelines by June 2020, however, there are concerns that applying the measures is impossible for a great number of decentralized blockchains.
“[The countries need to] obtain and hold required and accurate originator [sender] information and required beneficiary [recipient] information and submit the information to beneficiary institutions … if any. Further, countries should ensure that beneficiary institution… obtain and hold required (not necessarily accurate) originator information and required and accurate beneficiary information,” said FATF.
Not long ago, the FATF said the recommendations will apply to its 37 member nations. Also, the intragovernmental body demanded that “virtual asset service providers” (VASPs), as well as cryptocurrency operators, should share intel about its consumers to one another when they make a transaction.