Regulation
Monero hits eight-year low against Bitcoin as regulatory pressures mount
Monero The XMR token fell to its lowest point compared to Bitcoin over the past eight years, amid regulatory pressure on privacy-focused blockchain networks.
According to CoinMarketCap data, the XMR-BTC chart reached 0.001954 BTC today, down 50% from the year-to-date measurement. Additionally, the digital asset’s US dollar value has also struggled, falling more than 20% over the past year to less than $120 at press time.
Nonetheless, Monero developers are stepping up efforts to improve the network’s privacy features despite regulatory challenges.
FCMP
A recent announcement on its website revealed a new privacy mechanism: “Full Chain Membership Proofs (FCMP)», designed to supplant the current Rings system. Although the Rings system ensures sender privacy, it is riddled with vulnerabilities such as EAE attacks, chain reordering complications, and sensitivity to statistical analysis.
FCMP eliminates these risks, ensuring complete user anonymity. He added:
“Full chain membership evidence proves that the output spent is one of any output in the chain, eliminating all of these risks. This means that each entry goes from an immediate anonymity set of 16 to 100,000,000.”
In particular, two important proposals emerged for the implementation of FCMPs. The first proposal aligns with the next Seraphis upgrade, aimed at boosting efficiency and privacy with tailored evidence. Meanwhile, the second proposal, designed as a countermeasure to spam attacks, introduces features such as transaction chaining, outgoing view keys and secret passing autonomously compared to Seraphis.
Privacy under attack
Monero’s network strengthening efforts coincide with increased regulatory oversight of privacy-focused crypto tools.
Assistant Secretary of the U.S. Treasury Adewale Adeyemo noted the exploitation of anonymity-enhancing tools, such as mixers, by terrorist organizations and rogue states like North Korea to obscure the origins of illicit digital assets.
In the interest of compliance, the US government has launched legal actions against the developers of Tornado Cash, a crypto-mixing service. More recently, the government arrested the co-founders of Samourai Walleta privacy-focused service provider, for allegedly operating an unlicensed money transfer business.
Therefore, several crypto platforms including Binance and OKX, have privacy focused digital assets from their platforms to comply with evolving regulatory standards.
Despite these developments, prominent figures in the crypto world, including Ethereum co-founder Vitalik Buterin, have continued to plead for the legitimacy and innovation of the sector.