ShapeShift Confirms Regulatory Risk Led to Privacy Coin Delistings

In brief

  • A ShapeShift executive confirmed the platform has delisted Monero, Dash, and Zcash.
  • All three are privacy coins, some of which have drawn scrutiny from US regulators.
  • While ShapeShift is “de-risking” the company, several US exchanges still offer these coins.

Crypto trading platform ShapeShift delisted privacy coins Monero, Dash, and Zcash to limit the company’s regulatory risk, according to ShapeShift.

“We delisted all those coins at the same time, for the same reason,” ShapeShift Chief Legal Officer Veronica McGregor told Decrypt. “We are de-risking the company from a regulatory standpoint, so, for now, we are not working with those coins. We may revisit the situation in the future.”

Decrypt first reported the delisting of Monero and Dash last week. At that time, ShapeShift founder and CEO Erik Voorhees said the decision to remove Monero had been made months prior, though he wouldn’t provide further comment on the reasons behind the move.

Traditionally, privacy-centric ShapeShift has intentionally lagged behind in regulatory adoption, at least compared to more cautious centralized exchanges. As part of a philosophical dispute with state regulators over mandates to provide customer details, the company chose to instead cut off services in New York and Washington states. The company softened its stance slightly in 2018 when it adopted “know your customer” rules.

 

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One big question is whether major US cryptocurrency exchanges see the same regulatory landscape ShapeShift does.

Monero, the top privacy coin by market cap, has been taboo for most US exchanges apart from Kraken, with CEO Brian Armstrong citing regulatory concerns in the US. He doesn’t have to look far, as both the IRS and the Department of Homeland Security have contracted blockchain tracing firms to crack the XMR blockchain’s method for obfuscating transactions.

However, Zcash is currently available on Binance.US, Coinbase, Gemini, and Kraken. In September, Gemini, traditionally cautious about being above-board with regulators, allowed ZEC users on the exchange to use shielded withdrawals, an optional privacy feature for Zcash addresses.

As for Dash, most American users can buy it on Binance.US., Coinbase, or Kraken. 

Decrypt has reached out to representatives of the above exchanges for comment.

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