The developers of privacy coin Monero (XMR) and privacy protocol Tari Labs are preparing to publish a guide—in the form of a whitepaper—to let exchanges know how they can list Monero while complying with regulations.
Monero is a cryptocurrency that has a layer of privacy stopping anyone from observing transactions on its blockchain. But while this is good for those who use it, it makes it harder for exchanges to track what’s going on—a legal requirement.
On Monero, transactions are private by default. Image: Shutterstock.
Last week, Coinbase CEO Brian Armstrong said he would like to list Monero but added that the exchange is too concerned with regulators to do so. And with other exchanges in the same boat, the adoption of privacy coins has slowed right down. But, if this whitepaper is successful, it could start to turn things around.
“We believe the whitepaper to be the most comprehensive and authoritative analysis of privacy tokens and related AML concerns to date and are very proud of our involvement in this great effort,” said Louis Willacy, regulatory compliance general counsel at Tari Labs.
The whitepaper is called “The Fundamentals and Regulation of Privacy-Enabling Cryptocurrencies” and will be published by law firm Perkins Coie.
According to Tari, the whitepaper will acknowledge that there are greater risks involved with privacy coins but that these risks can be met with enhanced compliance tools.
Willacy added, “While the authors support their findings with exhaustive research and detailed analysis, the whitepaper’s core conclusion is deceptively simple: Regulated financial institutions can comply with AML obligations when supporting privacy tokens. Period.”
So far, Monero has been delisted from five crypto exchanges, including Bithumb and Huobi Korea. But will this whitepaper be enough to bring it back?