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OKEx Korea, an international cryptocurrency exchange, notified in a statement originally made on 10th September that it will cease to support five cryptocurrencies; Monero (XMR), DASH, Zcash (ZEC), Horizon (ZEN) and Super Bitcoin (SBTC). The company will end transaction support on October 10th and the end of withdrawal facility two months later, on 10th December.
In the statement made, OKEx Korea claimed that the reason for the termination of support was because the following five cryptocurrencies breach the conditions set forth by the Financial Action Task Force (FATF) by infringing on their “travel rule.”
The travel rule was introduced by the Financial Action Task Force in a set of digital exchange guidelines to avoid illegitimate crypto transactions. The recommendation of travel rule states that the information of both sides involved in a digital exchange will be collected and recorded, despite the current nature of cryptocurrency designed to keep exchanges anonymous.
The addition of rules to crypto exchanges orders businesses involved in cryptocurrency transaction of funds worth more than $1,000 to disclose information regarding it. The information includes the names and account numbers of both the originator and the beneficiary as well as location information. The FATF is permitted to use the information gathered to detect illicit activities then.
The five cryptocurrencies – Monero, Dash, Zcash, Horizon and Super Bitcoin – do not allow the collection of such information as they are privacy-based and conceal the details of digital transactions by keeping the details of the sender and receiver anonymous.
The FATF Set New Strong Crypto Recommendations
The FATF recommendations are internationally-backed guidelines to catch suspicious activities on a global scale, including money laundering and terrorist funding. They are outlined to increase transparency on large-scale transactions and recently have started focusing on the importance of transparency in the cryptocurrency market.
In a public statement released by the FATF on June 21st this year, they reinstated these concerns over illicit activities masked by crypto transactions and called for the international community to take action in their respective countries.
So far, only the crypto exchange OKEx Korea has acted against specific cryptocurrencies not following the guidelines of the FATF and more digital exchanges might follow suit.
By June 2020, the guidelines are expected to be implemented internationally but some concerns are being raised about the feasibility of travel rule. Cryptocurrencies like the ones mentioned above make crypto transaction anonymous and hard to identify in a pool of users due to their inherent design.