Monero’s (XMR) Privacy Under Pressure: Can It Withstand Regulatory Scrutiny?

• Monero (XMR) continues to grow despite a coordinated campaign against privacy tokens and the previous delisting from major centralized exchanges.
• The price is currently holding above a crucial support level at $340 after declining from a monthly high of $420.

Amidst the fast-growing interest in tokens centred on full decentralization and anonymity, Monero has emerged as one of the most preferred and resilient of all. Created in 2014 as a fork of Bytecoin, Monero (XMR) exists as one of the oldest and most popular privacy coins.

The asset combines new technologies to deliver a high level of confidentiality. Looking into this, we found that it uses Dandelion++ Protocol to hide the IP address of the transaction source.

Also, it uses Ring Confidential Transactions to hide transaction amounts while resorting to Stealth Addresses to ensure that the recipient address is hidden from the public on the blockchain. Apart from these, it also uses Ring Signatures to hide the identity of the sender. Basically, this is done by mixing the transaction with others in a batch.

While it has managed to keep transactions from being traced by even forensic analysis on the blockchain, its modus operandi seems to have become a major concern to regulators, who have subdued its growth and subjected it to severe crackdowns. As previously mentioned in our report, Binance delisted the asset in early 2024.

In October 2024, the Kraken exchange also pulled the plug on the asset, announcing to delist the XMR/USD and XMR/EUR for users within the European Economic Area (EEA).

Kraken remains mission-driven and committed to supporting the most comprehensive set of digital assets possible, in alignment with our regulatory and compliance obligations.

Prior to this, Kraken had discontinued XMR for registered users in Belgium and Ireland. Research shows that the decision was made to comply with the anti-money laundering (AML) measures introduced by the European Union. Reviewing the new AML standards, we found that it strictly prohibits the use of privacy tokens like XMR to make merchant payments. Also, Crypto asset providers were prohibited from offering privacy coins.

Monero (XMR) and Previous Regulatory Resistance

Historically, Monero has faced regulatory resistance within different jurisdictions. In 2018, Japan announced a strong restriction on anonymity tokens. A similar decision was taken by South Korea in 2020 followed by Australia. On February 7, 2023, Dubai also announced that it is ceasing all operations related to privacy coins.

Regardless of these, XMR’s adoption continues to skyrocket. As we discussed earlier, its recent interest was likely triggered by the Cuprate node launch which reduced the sync time to 20 hours.

According to our market data, the asset is currently the 23rd largest crypto with a market cap of $6.3 billion. In the last seven days, XRM has surged by 0.2%, extending its monthly gains to 24% and trading at $344. Fascinatingly, this was rightly predicted by CNF in a previous news brief.

Meanwhile, this is a significant decline from its monthly high of $420. Based on our data, XMR recorded an impressive rally starting from April to mid-May, surging by 150% within the period to hit $420, as highlighted in our recent analysis.

Basically, analysts believe that XMR’s continuous hold is strictly supported by privacy Decentralized Finance (DeFi), censorship resistance, and P2P projects. Meanwhile, its privacy is threatened by the continuous delisting of the token, quantum computing, and blockchain analytics innovation.

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