Coincheck to Delist Major Privacy Coins from its Exchange

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Tokyo based exchange Coincheck announced that they would be delisting trading pairs for privacy-based cryptocurrencies Monero (XMR), Zcash (ZEC), and Dash (DASH) later next month.

The move to delist these coins comes after the Japanese Financial Services Agency (FSA) has been putting pressure on exchanges to delist privacy coins, in fear of them being used for illicit activities. 

Coincheck, the victim of a $530 million hack in January, has been under the Japanese government’s spotlight ever since, so it is no surprise that they are quickly complying with the FSA’s recommendations. 

The announcement to delist these currencies came on Friday, following what Coincheck describes as a “drastic review” of their internal control system and a new management strategy that aims to provide greater security for their customers.  Coincheck also said that they cannot fully comply with anti-money laundering (AML) regulations while providing trading pairs for privacy coins.

Following the hack in January, Coincheck’s management team was found to be unable to abide by the business improvement order issued by the FSA, which led to Coincheck’s acquisition by Monex. Coincheck’s new owner, Monex, is behind the new changes, taking steps to increase the safety and regulatory compliance of the exchange.  

In addition to the major privacy coins being delisted, Augur’s reputation token (REP) will also be delisted due to its association with unlicensed gambling.

Monex CEO Oki Matsumoto said that he “expects the exchange to secure an official license in Japan next month,” according to a report from Fortune.  The recent changes are likely part of receiving official licenses from the government. 

In an official statement, Coincheck said that “It is necessary to further develop and strengthen the management system of AML / CFT [Anti-Money Laundering/ Counter-Terrorist Financing] in the future.”

Customers have until June 18th to withdraw the coins that are being delisted.  If customers do not withdraw their coins, Coincheck explained that “the target currencies held on the discontinued date will be sold at the market price and converted into Japanese yen.”

Currently, none of the 16 licensed cryptocurrency exchanges in Japan have XMR, REP, ZEC, or DASH, listed on their FSA applications.  As regulations continue to grow in Japan and abroad, it may become more common to see privacy coins being delisted from exchanges, deflating both the price and liquidity of those coins.