- All privacy coins are now illegal in Dubai
- Japan and Europe have also taken measures against them
Under new laws adopted by the emirate, it is now illegal to issue, trade, and perpetrate any other activity involving Zcash, Monero, and other anonymity-enhancing cryptocurrencies, CoinDesk reported.
Dubai published its new crypto regulations on Tuesday, setting out validation and licensing requirements for digital asset companies and coin issuers who want to do business in the emirate.
Untraceable coins not wanted
Under the rules, anonymity-enhancing digital assets are defined as virtual assets that make it impossible to trace ownership or transactions via distributed public ledgers and for which there are no mitigating mechanisms or tools to enable ownership identification or traceability.
Angela Ang of blockchain firm TRM Labs explained:
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.
Dubai’s contradictory policy
Dubai has been making efforts to attract crypto and blockchain companies to its jurisdiction. At the same time, its watchdog, the Virtual Assets Regulatory Authority (VARA), is cracking down on crypto.
VARA has said that it’s aiming to develop a global economic sustainability model framework within an innovation-focused realm that is future-focused, borderless, and tech-agnostic. They plan to achieve this based on specifically tailored guidelines and rules, which are designed to mitigate market risk and bring certainty and clarity.
Following in the footsteps of Japan and Europe
Watchdogs in Japan have also taken measures against anonymity-enhancing crypto. They made moves to ban privacy coins back in 2018.
In November last year, the European Union indicated it was considering banning cryptocurrencies that hinder traceability. According to a legislative draft from November 9, credit institutions, crypto asset service providers, and financial institutions will not be allowed to keep privacy-enhancing coins. The draft was distributed among all EU member states for comment.
