A few weeks ago, it seemed that governments in several countries were on the hunt for crypto mixers and other ways, such as privacy coins, to ensure anonymity within the crypto industry. If governments go after crypto mixers and privacy coins, how can they keep their heads above water?
Privacy coins and crypto mixers
The United States put Tornado Cash a while back on the blacklist and that also meant that the use of this crypto mixer was banned in the country. It raises the question of what could happen to other, similar projects in the near future.
It is therefore uncertain whether Monero (XMR), which is probably the largest and most popular privacy coin, will sooner or later be challenged by the US government, or a government elsewhere in the world.
It is a fact that authorities hate the extreme privacy of crypto users. From a government point of view, this is not surprising, of course. In this way, they have no insight into financial transactions and have no idea who or what is hidden behind, for example, activity on Tornado Cash.
In addition, it has been proven that crypto mixers are disproportionately used for criminal purposes. Money laundering in particular occurs frequently at crypto mixers. That a government is taking steps against this is actually perfectly logical.
Opposition to sanctions
What also makes perfect sense is the fact that the crypto community is resisting these measures from governments. The community has the feeling that a fundamental right, the right to privacy, is being taken away in this way. Crypto Interest Group Coincenter has even argued that the sanctions against Tornado Cash are not legal at all.
Then there is also the question of the enforcement of, for example, a ban. A government can say that the use of Tornado Cash is no longer allowed, but someone who knows what he or she is doing don’t stop that. It can therefore be stated that a ban actually only affects ‘normal’ users.
Nevertheless, the future for privacy coins and crypto mixers looks uncertain. Due to pressure from governments, crypto exchanges are forced to cooperate with applicable sanctions and bans. That may mean that the use of crypto mixers and privacy coins will be relegated to the depths of the crypto industry.