Kraken will discontinue its support for the cryptocurrency Monero (XMR) in the European Economic Area (SEE)
Kraken will cease to provide support for the crypto Monero (XMR) in all markets of the privacy token in the European Economic Area (EEA) effective October 31, 2024.
This decision will affect numerous trading pairings, such as exchanges with United States dollars (USD), euros (EUR), Bitcoin (BTC), and Tether (USDT). Regulatory and compliance obligations that Kraken has declared it must comply with are the primary motivation behind this decision.
Launched in 2014, Monero is one of the most widely used privacy tokens in the cryptocurrency industry. Its primary characteristic is its capacity to provide a high level of anonymity in transactions, which sets it apart from cryptocurrencies such as Bitcoin, where transactions, despite being pseudonymous, are traceable on the public blockchain.
Monero employs sophisticated technologies, including covert addresses and ring signatures, to guarantee that transactions are entirely anonymous, rendering it virtually impossible to trace the origin, amount, or destination of the money.
This attribute has rendered Monero the preferable option for users who desire to safeguard their financial privacy. Nevertheless, it has also prompted apprehension among regulatory authorities, who are concerned about the potential applications of Monero for illegal activities, including the financing of terrorism and money laundering. This decision by Kraken to discontinue support for Monero in the EEA is likely due to these concerns.
The regulation of criptovalute is becoming more stringent in Europe and the European Economic Area (EEA), which encompasses 30 member countries, including all the states of the European Union, Iceland, Liechtenstein, and Norway.
In particular, the anti-money laundering (AML) regulations and Know Your Customer (KYC) have become a fundamental component of all cryptocurrency exchanges that operate in the region.
Markets in Crypto-Assets (MiCA) is a legislative framework that the European Union has recently implemented with the objective of comprehensively regulating the cryptocurrency market. MiCA, in conjunction with other anti-money laundering regulations, mandates that cryptocurrency exchanges comply with more stringent transparency and traceability standards for transactions.
Due to its intrinsically anonymous nature, Monero does not satisfy these criteria, which explains the increasing pressure on exchanges to discontinue support for this token.
According to Kraken, the primary cause for the termination of support for Monero was these compliance obligations. The exchange’s decision to continue supporting other cryptocurrencies in the EEA, despite its clarification, is a clear reflection of the global trend of increased regulation influencing privacy tokens.
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