This Country Bans Trading Of Privacy Coins; Monero & ZCash In Trouble?

A list of regulatory requirements has recently been published by the Virtual Assets Regulatory Authority (VARA), which is the sole autonomous regulator of virtual assets in the emirate of Dubai. These requirements are specifically intended for cryptocurrency businesses that intend to operate in the country. The new set of laws include a variety of activities that are associated with virtual assets, such as running centralized exchanges, DEXes, advertising campaigns and custody, among other things.

Dubai’s VARA To Regulate Digital Assets

The VA framework was built with regulatory certainty in mind, giving the market more clarity on what to expect in terms of operator accountability. Dubai’s regulatory body for virtual assets detailed new restrictions that will require crypto firms to secure required licenses before they can begin offering their services. In addition to this, it stipulates that these licensed entities must comply with anti-money laundering (AML) regulations and risk assurance criteria of the highest possible degree.

In its official announcement, the autonomous regulatory body states that:

The Regulations set out a comprehensive Virtual Asset (VA) Framework built on principles of economic sustainability and cross-border financial security.

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VARA will try to enable VA-associated economic stability, investor protection, and jurisdictional resilience after the new crypto regulations are implemented. The regulations cover a wide range of ground when it comes to seven different licensed VA activities. These activities are as follows: advisory services, broker-dealer services, custodial services, exchange services, crypto news, lending-borrowing services, payments and remittances services, and VA management and investment services.

Privacy Coins Deemed Illegal

In addition, the issuing of new tokens is a regulated activity under the VARA regime. This is done so that consumers may make a more educated decision regarding new tokens being issued in Dubai, as well as the obligations that are linked with the issuer. According to the information that has been made public, the issuance of privacy coins is explicitly prohibited.

Issuance of privacy coins is specifically outlawed 😔

— Irina ₿. Heaver (@IrinaHeaver) February 7, 2023

This raises a major concern for top privacy coins like Monero (XMR), Zcash (ZEC) and Dash (DASH) — all of which have essentially become synonymous with legacy coins such as Bitcoin and Ethereum. Among the top 100 privacy-focused coins in the crypto market, XMR tops the list with a staggering market cap of $3 billion, followed by ZEC at $748 million and DASH roughly at $725 million.

Although altcoins with privacy as their core fundamental has been subjected to previous regulatory concern, it hasn’t been barred by any country or jurisdiction, until now. However, it is still unclear whether or not the authority will consider the circulation or possession of such cryptocurrencies to be a violation of the law. As things stand, the prices of the top-ranking privacy coins remain relatively unscathed by the recent crypto news and are currently trading in the green.

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