OKEx Korea will follow Upbit to delist ‘dark coins’
OKEx Korea will delist so-called dark coins, following a similar move by Upbit. Dark coins are cryptocurrencies that are totally anonymous. OKEx Korea announced through its homepage on Tuesday that it will stop supporting transactions of five dark coins: XMR, DASH, ZEC, ZEN, and SBTC. Why delist dark coins? According to a spokesperson from OKEx Korea, it is delisting dark coins because supporting transactions in those cryptocurrencies could violate regulations or government policies. It is a move to follow the Travel Rule advised by the Financial Action Task Force (FATF), an inter-governmental body set up to combat threats to the international financial system like money laundering, on virtual asset service providers. To abide by FATF guidelines — the same reason as Upbit One day earlier, Upbit also announced it will stop supporting transactions in dark coins. The FATF had advised the Travel Rule on virtual asset service providers at its general meeting in February. The rule requires cryptocurrency exchanges to collect and transfer customer information including transfer originator name and address as well as beneficiary name. Dark coins cannot abide by the Travel Rule Because dark coins are used to protect the privacy of users, virtual asset service providers cannot track them. The only data available is that a certain transaction took place, but no information about who it involved. Even if additional information is added, data about the transfer originator and beneficiary gets mixed. It is not possible to collect the information required by the Travel Rule when using dark coins. Will Darkcoins disappear from cryptocurrency exchanges? Dark coins are likely to disappear from cryptocurrency exchanges and some like Upbit have already halted supporting the coins. In Japan, where cryptocurrency exchanges need to be registered or essentially approved by the financial authorities, it is not likely the authorities will give licenses to exchanges if they support dark coins. Among 20 exchanges that have completed registration, there is no exchange that deals with dark coins. In New York, exchanges need to obtain a license issued by state financial authorities to start operations. According to an official from the Financial Services Commission in charge of cooperating with New York financial authorities, the "major standard for issuing the license to exchanges is whether the financial authorities can track exchanges and coins traded at exchanges." This is because the authorities can only prevent money laundering and tax evasion once they can track transactions. FATF's guidelines have not yet been reflected in local law, but it is only a matter of time. As a preemptive measure, more exchanges are likely to voluntarily delist dark coins.