Today’s Huobi Global news is symptomatic of a very specific war being waged between regulators and crypto developers. Privacy is woven into the very fabric of the asset class, but now, those days could be on their way out. Amid other huge storylines regarding regulation and privacy, the crypto exchange is choosing to abandon support for the industry’s biggest privacy players.
Privacy has been an integral part to the blockchain’s history. Bitcoin (BTC-USD), the first massively-popular crypto, was created pseudonymously, with its owner still unknown today. Developers have since taken to anonymity in producing projects. But privacy has even more used for the end-users themselves. By keeping transactions anonymous, one can prevent others from seeing the scope of their wealth, and it can ensure money isn’t being tracked by third parties, preserving one’s own safety.
Crypto advocates would argue that these benefits are necessary for the blockchain world. But, crypto skeptics would almost argue against anonymity. The crypto market has been under fire for years now over its role in the world of cybercrime. And in the last year, these criticisms have been amplified as investors see notorious hacker groups shifting attention toward the industry.
It doesn’t come as much of a surprise, then, that the U.S. government has begun taking on anonymity in cryptocurrency. With crypto crime on a meteoric rise, cracking down on anonymity would allow agencies a better chance at tracking down illicit activity.
This has resulted in the U.S. Treasury’s highly polarizing sanctions against crypto mixer Tornado Cash. Crypto-mixing services can be utilized as a money-laundering tool, as the Treasury points out. But the decision is getting major blowback from even the largest crypto corporations as a violation of personal freedoms. Nonetheless, these regulatory pressures are continuing to ripple across the industry.
Huobi Global Drops Privacy Coins From Exchange During Privacy Crackdown
The sanction decision is divisive, seen as a step too far by industry advocates. But while some companies remain outspoken against the decision, others are bending the knee to comply. Huobi Global is one such company; as Huobi continues its efforts to reach the U.S. market, dropping support for crypto privacy is a necessary step to appease these regulators.
Seychelles-based Huobi Global is one of the crypto world’s biggest exchange players. Serving primarily the Asian and Oceanian markets, the platform processes hundreds of millions of dollars worth of transactions each day.
And in its efforts to expand its reach, Huobi has been keeping the U.S. market well within its sights. Throughout 2022, the company has been hustling to become licensed to operate within the U.S. Recently, the company obtained licensure from the U.S. Financial Crimes Enforcement Network (FinCEN).
But with the Treasury’s Tornado Cash sanctions, the company apparently doesn’t see this licensure as enough to prove its commitment to stopping crypto crime. In an effort to get ahead of U.S. compliance rules and better its chances of expansion to the American market, Huobi is dropping seven different privacy tokens from its trading platform.
Among the tokens being de-listed are leading players in the privacy niche like Monero (XMR-USD) and Zcash (ZEC-USD). These cryptos will be removed on Sept. 19, with deposits already suspended. The company says these cryptos are seeing de-listing for not complying with Huobi’s own rules. Additionally, the company is announcing the suspension of its futures, OTC and margin trading services, among others.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.