Dubai Prohibits Privacy Coins Like Monero Under New Crypto Rules
The issuance of anonymity-enhancing crypto are banned under the Emirate's new regulations for digital assets.
In Dubai, the issuance of, and all activities related to, anonymity-enhancing cryptocurrencies such as monero (XMR) are prohibited under new laws published Tuesday.
The jurisdiction in the United Arab Emirates (UAE) published its long-awaited crypto regulations, which sets licensing and authorization requirements for virtual asset companies and issuers looking to operate in Dubai.
The new rules define anonymity-enhancing crypto as "a type of Virtual Asset which prevents the tracing of transactions or record of ownership through distributed public ledgers and for which the [Virtual Asset Service Provider] has no mitigating technologies or mechanisms to allow traceability or identification of ownership."
Regulators in other jurisdictions like Japan have also taken steps to prohibit privacy-enhancing crypto. The European Union is also considering prohibiting tokens that hinder traceability.
"Any obfuscation of fund flows poses a challenge to detecting illicit activities, so it is unsurprising that regulators react strongly to these kinds of asset classes and mechanisms,” said Angela Ang, senior policy adviser at blockchain intelligence firm TRM Labs.
Crypto activities in Dubai are supervised by its Virtual Assets Regulatory Authority (VARA), set up last year. The emirate has been working to attract attract crypto and blockchain companies to set up shop in Dubai.
UPDATE (Feb. 8, 10:33 UTC): Adds comment from Angela Ang.
CORRECTION (Feb. 8, 16:08 UTC): Removes mentions of Zcash from headline and first paragraph. It is unclear whether Zcash is affected because the regulator made exceptions for mitigating features, which theoretically could include Zcash's "unshielding" option.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.