The Financial Services Authority (FSA) of Japan is trying to make the exchange houses that live in their country stop working with Monero, Zcash and Dash, three currencies dedicated to privacy that, according to this regulatory body, “favor the criminals. ”
Sources close to the FSA say the agency is taking measures to “discourage” the use of altcoins that have become attractive mechanisms for cybercriminals and money laundering, according to Forbes. A measure linked to the complexity or impossibility of identifying participants in a transaction with private cryptocurrencies such as monero (XMR).
The position of the Japanese government is aligned with the investigation carried out by Europol and the London Police last February; process in which both organizations established that the anonymity of monero (XMR), dash (DASH) and zcash (ZEC) was “ideal” for money laundering, for being able to mask the information of the real user behind the transaction.
Keep in mind that the blockchain of private cryptocurrencies, like the three mentioned, work in such a way that it is practically impossible to identify the sender or receiver of the funds handled in the chain. This provides high levels of privacy to users, but in turn makes them attractive for the realization of quick and anonymous payments for purchase of illegal weapons, drug trafficking, money laundering, financing of terrorism and even tax evasion, according to investigated Europol. A panorama to which we must also add the growing number of cybercriminals who use this private cryptocurrency as a payment method of ransom, after attacks with ransomware.
The use of private cryptocurrencies for illicit purposes has negative effects for the entire ecosystem, mainly for exchange houses that move internationally towards regulation. Well, if the state considers that these digital currencies allow illicit activities, the regulated exchange companies must adhere to the guidelines of the financial organizations and eventually eliminate the trade of these altcoins.
An example of this was the Japanese exchange house Coincheck, who since last March do not trade DASH, XMR or ZEC because they are “hard to track” currencies. A measure taken to “have better safety standards”, during a review process by the FSA, after the hack suffered by the platform last January.
THE DARK SIDE OF CRYPTOCURRENCIES
The use of cryptocurrencies to finance illicit activities is a problem that the regulatory initiatives currently face with Monero, Dash and Zcash, but which for almost 6 years they faced with Bitcoin and SilkRoad.
As in that case, and with the financing of illicit activities with any type of currency, the measures can not be limited to the payment tool adopted by the criminals, because that is not the real problem. Especially if we consider that the fiduciary money promoted by traditional banking is also used in illegal activities.