Coincheck Reportedly Ditching Monero, Dash, Zcash
To combat the possibility of money laundering, Coincheck has reportedly deciding to halt the trading of three privacy-oriented cryptocurrencies on its platform.
Coincheck, the Japanese crypto exchange recovering from a gargantuan hack that took place in January, is poised to block trading of Monero, Dash, and Zcash, the Japan Times reported, citing sources in the know.
Coincheck lost more than $530 million worth of cryptocurrency as a result of the breach. Not only was its liquidity compromised but the exchange also faced fines and orders from Japanese authorities after it was raided as part of an investigation into what went wrong and what could prevent other events like this.
Last week, Coincheck restarted trading of NEM — the cryptocurrency targeted in the hack — but is now preparing to block Monero, Dash, and Zcash.
One thing these three cryptocurrencies have in common is their strong privacy orientation. They have powerful features that anonymize the identities of traders.
There are also suspicions these coins were used to launder the NEM that the hackers stole from Coincheck.
Perhaps the exchange doesn’t want to facilitate transactions that might help the thieves reclaim some yen in exchange for the NEM they looted through intermediary privacy currencies.
An unnamed security expert suspects that half of the proceeds from the Coincheck heist may have already been laundered into other cryptocurrencies to help mask their re-entry into the “white” market, the Japan Times said.
Zcash and Monero, in particular, make this quite easy as both cryptocurrencies actively mask crucial details about transactions and thus impede tracking down people who launder money.
These cryptocurrencies have become a thorn in the side of authorities because they cannot be reliably tracked down, as is the case with other digital assets.
Bitcoin, for example, could become less anonymous than fiat cash if someone decides to use an exchange in a country that requires KYC verification for account creation.
Once a person uses an exchange, it’s basically “game over” for their anonymity because authorities will be able to associate every transaction made on their wallet with their identity, name, home address, and any other details the exchange requires of them to provide.
Zcash and Monero are distinctly mining-oriented currencies. Many people prefer to generate new coins rather than buy them from an exchange, making the task of gathering personal data a daunting one.
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