Crypto Exchange Changelly Can Forcibly Lock Users’ Monero If Necessary
Changelly, an instant exchange platform that allows investors to use credit cards to securely and instantly purchase cryptocurrencies, can reportedly lock user accounts that attempt to exchange the privacy coin Monero (XMR).
According to a recent report by The New Web, the exchange platform actively monitors transactions on its platform for “suspicious” behavior, reserving the right to fully block any transaction attempted from a flagged account. These transaction blocks come with a withholding of funds, actions that stem from the company’s ever-evolving Know-Your-Customer (KYC) policies.
A spokesperson for Changelly explained further in a statement provided to TNW.
To all Monero community, our risk management system doesn’t mark all transactions out of the blue. […] Monero is the crypto that hides a sender and recipient thus making transactions untraceable. This [is] a reason why big amounts of other currency got to be checked [sic] before [it’s] converted to XMR.
While Changelly did not state the exact criteria that it used to flag user accounts, the exchange noted that it has seen an increased number of money laundering cases.
This will likely not be an isolated policy, as crypto exchanges begin to deal with increasing government regulatory pressure. Given the underlying utility of privacy coins for illicit activity, it makes sense why regulators are beginning to target this digital asset class.
However, the illicit reasons that make these coins a target also give them significant long-term value. So much so that a recent report by the Satis Group even went as far to claim that privacy coins have the largest upside of the entire cryptoasset market, noting that the largest end-markets will primarily use Monero (~60%) and Zcash (~20%).
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.