After the IRS confirmed that they are launching an initiative that would allow the regulator to track privacy-focused cryptocurrencies such as Monero, Perkins Coie’s research offers a fresh perspective.
According to the international law firm, regulatory authorities around the world have taken sufficient measures to make sure anti-money laundering (AML) cannot be facilitated as easily as some believe through the use of privacy tokens.
The report cited a number of privacy tokens used within financial regulatory structures used by several high-profile institutions around the world, including the U.S. Financial Crimes Enforcement Network (FinCEN), the New York Department of Financial Services (NYDFS), Japan’s Financial Services Agency (FSA), the U.K.’s Financial Conduct Authority (FCA), and the Financial Action Task Force (FATF).
In fact, it argued that privacy coins mean there is a smaller risk of conducting AML operations. The existing regulations cover any risks related to money-laundering, the report argued, and the current framework allows companies to combat money-laundering and any related crime thereof.
Even though there may be some misuses of private-focused coins, the benefits inherently outweigh any associated risks. As proof, the report established that 90 per cent of the addresses on the dark web were Bitcoin and Dash, while Monero and Zcash only accounted for 0.3 per cent combined.
Of course, an argument can be made that the above currencies are not as popular as Bitcoin to begin with. Yet, with a quick response from regulators, they are also very tightly regulated.