On Friday, Coincheck– a Japanese cryptocurrency exchange company made public its intention to withdraw its support for privacy coin brands Zcash, Dash, and Monero. Coincheck, which was sold off to Monex (a Japanese brokerage firm) in April, declared that it will no longer expedite trading activities for the aforementioned privacy coin brands with effect from next month.
Zcash, Dash, and Monero are cryptocurrency brands which offer privacy trading services to their customers, enabling them to make transactions which are less traceable compared to many other cryptocurrencies in the market.
Internal factors
The Tokyo-based exchange firm explained that it reached the decision to discontinue its services to the trio as an administrative strategy for the new management in place following a thorough and extensive review that was done on the system’s internal control structure. The new management seeks to run a system which comprehensively safeguards the customers’ interests. Coincheck was of the view that continued involvement with these companies will put the firm at risk since their operations to a greater extent hinders its compliance with anti-money laundering regulations- which does not in any way serve to protect the customers’ interests.
External factors
It is also reported by CCN that Japan’s Financial Services Agency (FSA) is mounting pressure on the exchange firm to deregister the privacy cryptocurrencies. Financial Services Agency is the regulatory agency that is responsible for registering cryptocurrency trading platforms in Japan.
Coincheck, under the former administration, was not in good terms with the regulatory agency given the fact that its FSA license was pending after the hacking which saw it crumble to its knees back in January happened. Part of the reasons why the license was being withheld was because of the failure of the firm’s former bosses to comply with the business improvement order which was issued by FSA following the incident. Therefore the decision to delist these privacy coins is perceived by experts as a strategic move by the new management to buy back Coincheck’s good relations with FSA.
Other causalities
Another company that is also set to suffer the same fate as that of the private coins is Augur’s reputation token (REP). REP which will be the native asset of the startup’s prediction market is set to be delisted as well following its perceived involvement with unlicensed gambling activities.
All traders have been given up to the 18th of June this year to withdraw their DASH, XRM, ZCASH, and REP coins failure to which they will be sold off at market price, converted to JY and then credit the JY to customer accounts.
