Do Privacy Coins Have a Future After This Disaster?
Privacy coins, cryptocurrencies that can't be tracked or traced, have always been a polarizing issue in the crypto industry. Despite concerns about how they might be used, privacy coins like Monero (CRYPTO: XMR) and Zcash (CRYPTO: ZEC) routinely rank within the top 50 on CoinMarketCap in terms of market value. There has always been demand for them because some people like to keep their online identities private and don't want their crypto transactions made available for all to see.
On Aug. 8, though, the U.S. Treasury Department blacklisted a piece of computer code known as Tornado Cash that enables users to anonymize their crypto transactions. As a result, the U.S. Treasury blocked access to Tornado Cash and prohibited U.S. individuals from using Tornado Cash in the future. While the U.S. government didn't punish privacy coins directly, it placed restrictions on the type of blockchain technology that makes them possible. This could be a disaster for privacy coins, especially because the U.S. government linked Tornado Cash to cybercrime and money laundering.
There's obviously a lot to unpack here. The U.S. Treasury Department acted via the Office of Foreign Assets Control (OFAC), which normally places restrictions and prohibitions on people, organizations, and other entities. And when it does impose penalties, it normally focuses on foreign nations such as Iran, North Korea and Russia that are in the headlines for the wrong reasons. It doesn't, however, typically prohibit pieces of code on the blockchain. And yet that's exactly what it did in this case, because Tornado Cash is essentially just a bunch of smart contracts on the Ethereum (CRYPTO: ETH) blockchain.
Source Fool.com
