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How Do Privacy Coins Complicate KYC Procedures?

Privacy coins, such as Monero or Zcash, use cryptographic techniques like zero-knowledge proofs to obscure transaction details, including the sender, receiver, and amount. This inherent anonymity makes it extremely difficult for exchanges and financial institutions to perform the necessary transaction monitoring required for AML compliance.

Consequently, many regulated exchanges de-list or avoid trading privacy coins.

What Is the Difference between KYC and AML?
What Is a “Non-Custodial” Exchange and How Does It Relate to the KYC/AML Problem?
What Are the Key Differences between Institutional and Retail KYC/AML Procedures?
How Do RFQ Platforms Manage the Balance between Anonymity and KYC/AML Compliance?