Are Anonymous Coins Dying?
A few years ago, anonymous coins were all the rage with crypto developers chomping at the bit to create the next anonymous coin. This spawned a whole selection of anonymous coins like Zcash, Monero, Zcoin, ZenCash… etc. There also cryptocurrencies with the option to trade anonymously like Dash.
These were all, for the most part, welcomed with open arms by the wider crypto community and users flocked to the new platforms and started trying out each one. For a year or so, times were good and the anonymous tokens were thriving, sometimes performing as well as the larger market players too.
Then things went south very quickly.
Japan Declared War on Anonymous Coins
Amid all the early success and fanfare, anonymous coins began to attract a lot of unwanted attention. Primarily this attention was from organised crime syndicates that saw an opportunity to transact in broad daylight without giving an iota of their personal data away. Deep web market places became a hive of activity with weapons, drugs and everything else (including things you simply don’t want to know about) all being purchased away from the authorities using coins like Zcash.
This meant that intelligence agencies and crime prevention agencies all over the world started to see cryptocurrency as a real threat to law and order. Monero and Zcash specifically were then targeted by the Japanese regulators who sought to ban them completely. Overnight the value of anonymous tokens everywhere took a hit but not as large as people expected. It gets worse…
Why Anonymous Coins Still Hold a Lot of Value
The naysayers and doom speakers on crypto forums all predicted an overnight death for anonymous tokens. The developers were adamant that their currencies were legitimate and not nefarious, while the authorities began making moves to restrict, regulate and in some cases ban anonymous coins. On the forums, everyone expected the value of the coins to drop to almost nothing.
After all, if it was only legitimate users then there would be other less scrutinised coins like Dash that offered the same functionality but in a more open fashion.
Truth be told, this happened but it didn’t crash the currencies as expected.
It became clear that the criminal enterprises held so much of these anonymous tokens that even the regular legitimate user-base moving away didn’t damage the value in the way that a mass sell-off of any other currency would.
The truth is, anonymous tokens are for the most part now propped up by crime.
What the Regulators are Doing Now
In Japan, the regulator has now imposed an outright ban making the use, trade and ownership of anon coins illegal. In the EU, this move is being watched closely with a view to implement the same type of legislation. The UK has made steps towards fully regulating all digital financial instruments and the already tight UK market place is expected to become tighter especially with the introduction of more robust tax measures. These tax measures and the need for transparency will likely push anon coins out of the UK marketplace entirely.
The US and Canada also see that tax is being lost to cryptocurrency and are moving to ensure that a more digitally relevant framework is in place. It doesn’t help that the current president of the United States, Donald Trump, openly expresses that he thinks Bitcoin is a scam. Considering that Bitcoin is fairly open in its transactions, anon coins are likely to do a lot worse under Trump’s administration.
While anonymous coins might live to fight another day, the sad reality is that often they are being kept in business by criminals that exploit and harm other human beings.