OKEX Korea Drops 5 Privacy Cryptocurrencies Citing FATF Rules

The Korean arm of the exchange has dropped support for privacy-enhancing cryptocurrencies including monero, zcash and dash.

Sep 16, 2019 at 10:01 a.m. UTC
Updated Sep 13, 2021 at 11:27 a.m. UTC

Regulatory pressure on cryptocurrency exchanges to stop providing users with access to so-called privacy coins is growing.

The South Korean arm of the Malta-based OKEX exchange announced early on Monday that it is to delist five cryptocurrencies that provide extra privacy features for users. From Oct. 10, the exchange will no longer support trading in Monero (XMR), dash, zcash (ZEC), horizen (ZEN) and super bitcoin (SBTC).

In its notice, OKEX Korea said it will delist cryptocurrencies that "violate laws or regulations [and] policies of government agencies and major agencies."

Specifically, in this case, it cited the "travel rule" recommendation to national regulators from the Financial Action Task Force (FATF) as the reason for pulling the five coins.

The exchange said that as per FATF's rule, "it is recommended that exchanges be able to collect relevant information such as the name and address of the sender and recipient of the virtual asset."

As such, it had decided to delist the cryptocurrencies that did not allow that data to be obtained.

The U.K. arm of Coinbase also dropped support for zcash in August, likely due to the need to identify users when required by authorities.

This summer, FATF finalized its recommendations to its 37 member nations, including a controversial requirement that “virtual asset service providers” (VASPs), including cryptocurrency exchanges, pass information about their customers to one another when transferring funds between firms.

The so-called travel rule has been a requirement for international banks when sending each other money on customers’ behalf for some time, but has been described as onerous for blockchain firms and harmful to user privacy.

The global anti-money laundering body gave members 12 months to implement the new recommendations that, while not mandatory, could see nations not complying put on a finance blacklist.

Since June, compliance solutions providers in the crypto space have been moving to launch systems aimed to help exchanges pass each other the required data.

OKEX Korea said that customers have until Dec. 10 to withdraw any of the five delisted coins from the platform. The assets will remain listed on OKEX's other platforms, a representative told CoinDesk.

Monero image via Shutterstock

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