Well, it looks like Dubai is cracking down on the wild world of privacy coins! They’re not taking any chances and have banned a whole bunch of privacy-focused crypto projects like Monero (XMR) and Zcash (ZEC).
Other projects like DASH, Horizen (ZEN), Verge (XVG), and Beam will also feel the heat. The regulator didn’t say whether third-party dApps like Tornado Cash will also be affected, so we’ll have to wait and see.
This all comes as more and more people are turning to privacy coins as a way to keep their funds hidden from prying eyes, especially those of the government. Dubai is taking steps to ensure the security of its crypto industry. All crypto firms must show where their crypto funds and assets come from, and they can only receive a license to operate from the regulator. Compliance with the regulatory framework is the only way to get the go-ahead.
Looks like Dubai is getting tough on anonymity-enhanced cryptocurrencies! The VARA (that’s the regulator in Dubai) has put out a statement saying that these types of tokens and cryptocurrencies are a threat to the country’s financial stability, and so they’re going to have to be banned.
Regulation Is Coming .#Jasmy & #Mystiko#Dubai Prohibits Privacy Coins Like Zcash and Monero Under New Crypto Rules .#Japan have also taken steps to prohibit privacy-enhancing crypto. The #European Union is also considering prohibiting tokens that hinder traceability. https://t.co/cgZnadJLzS pic.twitter.com/JiOgxC2zV7
— Houston (@Houston08068672) February 8, 2023
Are There Any Penalties?
If you’re a crypto firm or individual in Dubai who doesn’t follow the rules, you better watch out! You could be facing a huge fine of up to 20 million Dirhams (that’s about $5 million USD). And if you’re an institutionally-tied project, the fines can be even higher, reaching up to 50 million Dirhams ($13 million). Yikes!
There’s a bit of good news, though. These new rules only apply to crypto and digital asset firms operating in Dubai. If you’re located in the Dubai International Financial Centre (DIFC) economic zone, you’re in the clear! You’re under the jurisdiction of a separate regulator, so you don’t have to worry about these new rules.
But, the VARA still insists that they’re going to keep a close eye on things and make sure everyone is following the rules. So, if you’re in Dubai, better make sure you’re playing by the book!