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Bittrex Won’t Disclose Why It Withdrew Support for Dash, Zcash, Monero

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  • Numerous exchanges, like Bittrex, have delisted coins that have features to protect user privacy.
  • Explanations of why they’ve done so have been vague or non-existent.
  • It has set up clashes between the exchanges and Zcash, Monero and Dash over whether there is actually regulatory pressure to do so. 

There is a question that no one seems to want to answer. Why are exchanges delisting zcash, monero and dash (DASH)?

On New Year’s Day, cryptocurrency exchange Bittrex announced it would be delisting these three so-called “privacy coins” as of Jan. 15, adding its name to a growing list of exchanges that have done the same.

In a blog post announcing the development, Bittrex did not provide a reason for doing so. 

Bittrex: No explanation offered

The assumption has been that the delistings are related to know-your-customer and anti-money laundering (KYC/AML) concerns. But by and large, exchanges have delisted without much explanation, leaving users and privacy advocates out in the cold, with little recourse. 

“Where privacy is opt-in and not mandatory such as in dash or zcash, which allows the vast majority of transactions to remain traceable, the difference between these assets and bitcoin [or] ether is often just in focus and marketing,” Reuben Yap, project steward of the privacy coin firo told CoinDesk, as he saw exchanges also delisting firo in December. 

“In some cases – even where coins did not have any meaningful privacy features or even had them disabled – they weren’t spared from delistings, supporting the claim that many of these bans were established for form over substance.”

Bittrex did not cite any specific regulatory challenges or reasons for the delisting in its post, and declined to comment for this piece. Notably, the crypto exchange continues to host other privacy coins such as firo, verge and horizen at the time of writing, giving little insight into the rationale. 

‘No public regulatory rationale’

In response to Bittrex’s decision, Electric Coin Company (ECC), the makers of zcash, published a blog post that criticized the decision and asked a question that has yet to be answered – why?

“In spite of all the conjecture on Twitter, there is no public regulatory rationale for delisting zcash,” the company said in the post. “Law firm Perkins Coie recently published a paper that lays out how regulated entities can comply with regulatory requirements and support cryptocurrencies that include privacy as a feature.”

According to the paper, “Not only do privacy coins provide public benefits that substantially outweigh their risks, existing AML regulations properly and sufficiently cover those risks, providing a proven framework for combatting money laundering and related crimes.” 

Perkins Coie declined to comment for this article.

With a lack of specific regulation to point to, it seems that the decision to delist these coins is a decision made by the businesses themselves, rather than responding to some perceived immense, yet still unclear, regulatory pressure. 

In response to Bittrex’s decision, Kraken CEO and co-founder Jesse Powell tweeted, “Haven’t heard of anything on the regulatory side. Presumably, it’s something specific to their business.”

As Justin Ehrenhofer, a Monero developer, previously said, the most common reason given for delistings is de-risking from perceived (or direct) pressure from regulators and banks. 

“Most jurisdictions do not impose strict bans on these privacy-preserving cryptocurrencies, but they may require more detailed AML programs before feeling comfortable with them,” he said. 

ShapeShift and Bittrex’s responses

Indeed, “derisk” is the term that the exchange ShapeShift used when it delisted zcash, monero and dash last year. 

“We’ve taken down the privacy coins because of their regulatory concerns,” Veronica McGregor, ShapeShift’s chief legal officer, told CoinDesk’s Brady Dale in an interview. “At least for the moment, we’re not working with those coins.” 

They “were delisted at the same time for the same reason – to further derisk the company from a regulatory standpoint,” McGregor wrote in a followup email.

This week though, ShapeShift pivoted to routing orders through decentralized finance (DeFi) applications and integrated with multiple decentralized exchanges, abandoning the KYC regulations that sapped users from them when they were implemented in 2018.

Even as ShapeShift has added back support for dash, Dash Core Group CEO Ryan Taylor said in a recent Zoom interview with CoinDesk that they’d never heard from the exchange about being re-listed. They’d sent along their material arguing that their coinjoin function, introduced in 2014 and advanced for the time, was no longer enough to classify them as a privacy coin, particularly with bitcoin also having a coinjoin function. Eventually, with no communication from ShapeShift, they saw they’d been relisted. 

“There’s no definition you can set where we’re dash falls in the privacy coin bucket, and bitcoin falls out,” said Taylor. “All we’re asking for is fair treatment.” 

Need for privacy coin education

In Taylor’s experience with regulators around the world, he proactively engages with them and tries to educate them. This education effort isn’t new, and isn’t a reaction to Bittrex. 

“We’ve been working on this for a couple of years,” said Taylor. “And in my interactions with regulators, they don’t even understand how the technologies work. Almost always, when you ask them, ‘Why was dash included?’ They say, ‘I googled it.’”

“There is no regulatory requirement in the USA that would result in a coin being delisted due to it protecting the user’s privacy,” said Zooko Wilcox, cypherpunk and CEO of the Electric Coin Company

ShapeShift did not respond to questions regarding whether it would now add support for zcash and monero, or why they decided to re-list dash. 

Almost always, when you ask them, ‘Why was dash included?’ They say, ‘I googled it.’

ECC’s blog post also pointed out that both Coinbase and Gemini, prominent U.S. exchanges, support zcash. In September 2020, Gemini launched support for zcash shielded withdrawals, a first for a regulated exchange

ECC then questioned whether the decision came in response to the New York Department of Financial Services (NYDFS) rejecting the exchange’s application for a virtual currency and money transmitter license in part because of “deficiencies in Bittrex’s BSA/AML/OFAC compliance program.”

Coinbase and Gemini, both of which support privacy coins, hold such licenses. 

“ShapeShift and Bittrex have not told us why they delisted zcash,” said Wilcox. “Coinbase and Gemini continue to work with us to further increase their support for zcash.”

Bittrex declined to comment when sent a list of questions about the rationale behind the delisting, whether regulatory requirements forced it to do so, and if the action was linked to the concerns NYDFS raised. 

But given the numerous concerns about transaction monitoring, sanctions violations, major compliance issues such as inadequate customer due diligence, trying to strike down some of the more popular privacy coins could be a low-effort way to address these, but not if other privacy coins remain listed. 

No big deal

Kristin Boggiano, co-founder and president of CrossTower, a global digital asset infrastructure platform, said she did not see delisting of privacy coins as a trend in the industry, and that most digital asset trading platforms will evaluate the tokens they trade from time to time.

When asked why some exchanges were able to list these coins while others declined to, Boggiano said she couldn’t speak to other platforms’ listing decisions or frameworks but that  CrossTower’s current Digital Asset Risk Assessment Framework takes a number of factors into consideration when listing a token.  

“We consider trader feedback, market demand, whether our technology can support it, whether our vendors support it, regulatory considerations, and other compliance considerations,” she said in an email to CoinDesk. “The framework is dynamic because the industry is clearly rapidly changing.”

She did recognize that it’s natural there is a market for privacy tokens, especially given there is a growing awareness in the U.S. and internationally that the disclosure of certain personal information can cause serious issues. 

“There may be data mining, which can cause minor inconveniences if their information is sold,” she said. “However, it could also be sold to advertising agencies and other entities without consent, causing significant friction in digital operations. Worse, it may also be used for malicious purposes such as hacking, identity theft, blackmail and other harmful purposes.” 

Whether such delistings continue will seemingly be up to the perceived regulatory environment and exchanges involved, but a good place to start addressing the merits of the issue is the reasoning behind why these decisions are taken, rather than leaving users with little or nothing to go on.  

Source: https://www.coindesk.com/bittrex-disclose-delist-privacy-coins-dash-zcash-monero

Blockchain

Litecoin Price Analysis: 07 March

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The cryptocurrency market has been recovering from the sudden selling pressure it witnessed a few days back. Litecoin [LTC] has been trying to find a stable price level in the market currently, however, there have been recurring sell-offs pushing the coin even lower.

At the time of writing, the digital asset was trading at $182.68 with a market capitalization of $12.16 billion.

LTC one-hour chart

Source: LTCUSD on TradingView

The above chart of Ltiecoin highlighted the rise and fall of the price. Although a small surge carried the value higher, selling pressure has now replaced it. The price has been testing the support at $182.13.

If the price fails to hold onto this support, we may be seeing another sell-off in the LTC market.

Reasoning 

The Bollinger Bands have been diverging which was a sign of increasing volatility in the market. As the volatility in the market increases, there is a possibility for a trend change. However, the signal line along with the 50 moving average has remained under the candlesticks noting that a certain level of bullishness still exists.

However, the momentum was on a decrease as the selling pressure continued. The momentum has shifted towards the sellers’ side and may fall into the negative zone if the price breaches the support.

Meanwhile, the relative strength index has also moved away from the equilibrium zone. However, despite a selling pressure, the buyers were trying to level the market as the RSI was heading closer to the overbought zone.

Crucial levels

Entry-level: $181.89
Stop-level: $184.50
Take profit: $179.14
Risk to Reward: 1.06

Conclusion

The current trends in the Litecoin market were more bearish than bullish. As the coin tests support, there is a potential fall that looms at large. It may drop to $176 in the short term, however, the price may see a further retrace from this point if a bullish trend reversal fails to materialize.


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Source: https://ambcrypto.com/litecoin-price-analysis-07-march

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Decentralized finance may be the future, but education is still lacking

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Engaging in the traditional financial markets has become less appealing to consumers and institutional investors as of late. New opportunities are plentiful, with decentralized finance getting a lot of attention. However, that new movement is not without its risks and flaws, either.

For decades, consumers and institutional investors have explored the many different options presented to them in the financial world. This approach has worked out rather well, as one could even earn passive revenue on their savings account. Today, things look very different, as many banks charge negative interest rates and continue to exploit their customers.

Another problem compounding the lessening appeal of centralized finance is the ongoing impediments in the industry. More specifically, banks are forced to settle lawsuits regularly, mostly due to their wrongdoing. This ranges from opening accounts for clients without their knowledge, masking products under different names while providing the same service, money laundering and so forth.

Despite all of this, many people remain loyal to their banks or other financial institutions. Or that used to be the case, as decentralized finance has a lot of people interested today. Unlike traditional finance, DeFi has no exorbitant fees, unfair terms or financial exclusion. Instead, it is a movement that aims to bring financial services to everyone regardless of their current access to these products.

Making DeFi more accessible

While it may seem as if decentralized finance is destined to disrupt traditional finance, there is still a lot of work to be done. In its current state, DeFi primarily caters to users who have sufficient knowledge of the cryptocurrency market. Unfortunately, the crypto industry remains a niche market even today despite prices for Bitcoin (BTC) and Ether (ETH) moving up quickly in the past few months.

In fact, there are no viable guides on how to prepare yourself for these new financial opportunities. Every existing guide assumes the reader already knows the ins and outs of cryptocurrency, which is usually not the case.

Education is the first big step

Wading through the complex nature of DeFi requires clear and concise education. There is a rising need for educational platforms that address beginner levels of investing. Publications contributing educational content around DeFi noted significant growth throughout 2020 and early 2021. Educational initiatives have a goal to lower entry barriers to decentralized finance by educating people on cryptocurrency and the opportunities the broader industry provides. Ultimately, a good goal for DeFi would be for 100 million more people to have deposited at least $1 each into decentralized finance by 2025. It may seem like an easy goal, yet convincing millions of people to partake in this industry isn’t easy. Many people remain unconvinced by cryptocurrencies in general, and they will likely feel the same about DeFi.

We as an industry need to acknowledge that things need to improve to be taken more seriously by the masses. Making a global impact with complex structures and technologies and requiring the use of cryptocurrencies warrants clear and concise education.

A big catalyst for launching more educational initiatives now is the recent r/Wallstreetbets and GameStop saga. People worldwide suddenly found themselves in a position of power to make the financial market dance to their tunes. It depicts the need to make financial markets accessible to everyone, yet the current financial industry doesn’t always allow this to happen. This became apparent when the trading of GameStop stocks was halted by several providers to protect larger investors. It serves as an excellent example of how unfair the financial industry can be.

Creating a level playing field

At its core, the financial sector can operate without gatekeepers or centralized intermediaries. The DeFi industry has shown that this is possible, even though the industry is still in its early stages. Creating an environment where anyone can safely borrow, lend and trade directly is possible, but the educational aspect needs to come first.

As the public perception of traditional finances keeps taking blows to the chin, it is a matter of time until large groups begin exploring other horizons. Investing in cryptocurrencies has given many a taste of what financial freedom can entail. However, it is crucial to understand that this is only the first step along a long road toward achieving that freedom.

There is a lot more to DeFi than just owning Bitcoin, Ether or any other crypto assets. While that does grant one access to decentralized finance, the educational initiatives led by industry leaders will help explain how you can use these assets for more than speculative purposes. Through education, research and guidance, a new era of finance may just be around the corner.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Piers Ridyard is the CEO of Radix, the decentralized finance protocol. A Y Combinator Alumni, Piers joined Radix after exiting his previous company, which built DLT-based deal rooms for clearing syndicated insurance contracts.

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Source: https://cointelegraph.com/news/decentralized-finance-may-be-the-future-but-education-is-still-lacking

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How DAFI Protocol Rewards Long-Term Token Holders and Supports Sustainable Project Growth

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As more cryptocurrency projects are beginning to understand firsthand, keeping key stakeholders and early investors involved in a project’s ecosystem long-term is tough. With increasing speculation around new blockchain networks, specifically DeFi-focused platforms, cryptocurrencies can see instant price growth as they hit the market. With these profits too high for early investors to forgo, the people who supported the project earliest can end up cashing out, which is bad for the overall ecosystem.

DAFI Protocol has come up with an innovative solution to this problem, rewarding long-term users with a metric-based reward structure that allows new crypto projects to maintain their original community over time.

Synthetic Tokens Are the Answer

DAFI Protocol’s solution revolves around synthetic tokens, or newly minted tokens produced to represent the value of other assets. Using synthetic tokens, new projects can deposit a portion of their total supply into the DAFI protocol. Following the deposit, synthetic tokens representing ownership rights to the original coins will be minted and distributed to holders. These tokens are not tradable, meaning original token holders cannot monetize these synthetic tokens while they hold them. Their only use is exchanging back for the initial token after a predetermined time period runs out.

This may seem like it only benefits project development teams, but it rewards early token adopters as well. Following the distribution of the initial synthetic tokens, the number of tokens a user holds will change based on a smart contract algorithm that allows for the flow of token supply. Using a decentralized oracle, DAFI will be able to evaluate off-chain metrics such as token price, platform adoption, and trading volume to determine the platform’s growth. The more usability the platform receives over time, the larger the amount of synthetic tokens distributed to each token holder.

Creating Holders Out of Sellers

With DAFI, platforms are not discouraging speculation on their native cryptocurrencies; they just want the commitment to become a longer-term arrangement. With its innovative solution, DAFI turns investors from sellers to holders, incentivizing them to realize their investment value if the platform sees measurable growth.

This is extremely beneficial to new projects, as they need to establish a base of platform usage so they know what works well and where they need to improve. This structure will serve the best interests of projects and token holders going forward, as tokens will realize value based on the actualization of the network. Considering some projects worth hundreds of millions or billions of dollars receive almost no network usage, DAFI promises to properly incentivize stakeholders based on more than broad speculation.

There is currently no link between token holder rewards and network adoption; this needs to change. Although users may not be able to profit from short-term speculation through DAFI, they have a much better chance of generating value long-term alongside adoption. This mechanism will scare away gamblers and speculators hoping to get rich quick on the next hyped-up project, leaving investment opportunities for those who plan to stay with the project over an extended period of time. With this superior token distribution method, projects will utilize DAFI to deposit a portion of their token supply in favor of non-tradable and elastic synthetic tokens for users, rewarding them over time.

Image by anncapictures from Pixabay 

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Source: https://www.newsbtc.com/news/company/how-dafi-protocol-rewards-long-term-token-holders-and-supports-sustainable-project-growth/

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