Upbit designates ‘dark coins’ as investor-warned crypto assets
Cryptocurrency exchange Upbit classified XMR, DASH, ZEC, XHV, TUBE and PIVW as “investment warning crypto-assets,” on Monday, in line with the International Anti-money Laundering Organization (FATF)’s guidelines. The six cryptocurrencies are often referred to as “dark coins.” Upbit will review the six cryptoassets in detail and will terminate trading services if there is no sufficient elucidation. Investment warning for ‘Travel Rule’ The reason Upbit decided to designate the six coins is because of FATF guidelines. In a general meeting last February, the FATF applied a so-called “Travel rule” for virtual asset service providers. Accordingly, they can collect the sender and receiver’s data like the name and address, but are also obliged to offer information to authorities upon request. Privacy coins are not covered by the Travel Rule The six designated coins are privacy coins aimed at protecting privacy. This makes it impossible for virtual asset service providers to track records. The only record left is one that shows the existence of the transaction. Information on the sender and receiver is muddled, so exchanges cannot collect user data in the detail required by FATF guidelines. Possible inclusion in the special finances act The FATF guidelines are not covered in domestic law. It is also not specifically mentioned in the bill for “Acting on reporting and using specified financial transaction information” currently pending approval at the National Assembly. But if the FATF starts to review how the guidelines are carried out next June, there is a possibility of exchanges receiving penalties for violating rules. It remains to be seen whether the bill will include the FATF guidelines. “Apart from the institutionalization discussions, in respect of the FATF's agreement that crypto-assets should not be used for money laundering or illegal purposes, Upbit has decided to designate privacy coins, where it is difficult to identify the sender and recipient, as investment warnings,” the company said in a notice on its website.