Dubai Prohibits Privacy Coins Like Monero Under New Crypto Rules
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In Dubai, the issuance of, and all activities related to, anonymity-enhancing cryptocurrencies such as monero (XMR) are prohibited under new laws published Tuesday.
The jurisdiction in the United Arab Emirates (UAE) published its long-awaited crypto regulations, which sets licensing and authorization requirements for virtual asset companies and issuers looking to operate in Dubai.
The new rules define anonymity-enhancing crypto as "a type of Virtual Asset which prevents the tracing of transactions or record of ownership through distributed public ledgers and for which the [Virtual Asset Service Provider] has no mitigating technologies or mechanisms to allow traceability or identification of ownership."
Regulators in other jurisdictions like Japan have also taken steps to prohibit privacy-enhancing crypto. The European Union is also considering prohibiting tokens that hinder traceability.
"Any obfuscation of fund flows poses a challenge to detecting illicit activities, so it is unsurprising that regulators react strongly to these kinds of asset classes and mechanisms,” said Angela Ang, senior policy adviser at blockchain intelligence firm TRM Labs.
Crypto activities in Dubai are supervised by its Virtual Assets Regulatory Authority (VARA), set up last year. The emirate has been working to attract attract crypto and blockchain companies to set up shop in Dubai.
Read more: Dubai Mandates Licensing for Crypto Companies as It Sets Out Regulatory Requirements
UPDATE (Feb. 8, 10:33 UTC): Adds comment from Angela Ang.
CORRECTION (Feb. 8, 16:08 UTC): Removes mentions of Zcash from headline and first paragraph. It is unclear whether Zcash is affected because the regulator made exceptions for mitigating features, which theoretically could include Zcash's "unshielding" option.