- Amid chaos in the crypto space and huge selling pressure, Secret Token (SCRT) managed to pull off a 100% rally this week.
- Crypto privacy service providers have recently come under fire amid talk that Europe is considering banning privacy coins.
Since the FTX episode, a dark picture has taken hold throughout the crypto space. Bitcoin and most altcoins have been under heavy selling pressure over the past two weeks.
However, in these uncertain times, an anonymity-focused altcoin is outperforming the rest of the crypto market amid rumors that Europe is considering banning privacy coins.
Built on top of the Cosmos Network (ATOM), the secret (SCRT) is a privacy-centric chain with end-to-end encryption and smart contracts called “secret contracts”. The network allows users to make any coin or blockchain private by encrypting details such as sending/receiving wallet addresses, token balances, etc. when exchanging secret tokens.
To turn coins from some different blockchains into “secret tokens,” the project uses something called secret bridges. To convert coins from other blockchain networks, Secret first places the coins in a smart contract on the original chain. Later, they mint the equivalent amount of tokens on the secret network.
SCRT, the native Secret Network token recently made headlines for a strong rally. Earlier this week on Wednesday, the price of the SCRT token went parabolic, gaining more than 100% in just 24 hours from $0.64 to $1.29.
However, SCRT could not sustain the price gains and it pulled back significantly from there. At press time, SCRT is trading at $0.84, retracing more than 30% of its weekly highs.
Growing surveillance of privacy coins in Europe
Privacy coins are facing increasing pressure from regulators around the world, especially in the United States and Europe.
Financial Action Task Force (FATF) – the global regulator is seeking to enforce the “Travel Rule” which recommends that the government compel stakeholders such as banks, crypto exchanges, hosted wallets and OTCs over-the-counter (OTC) to share certain identifying information regarding individuals involved in crypto transactions worth $10,000 or more.
Regulatory agencies have been looking for crypto mixing services that can hide details of the original source of transactions. Earlier this year, the US Treasury sanctioned Ethereum-based crypto mixing service Tornado Cash. A few weeks later, the developer behind this open-source protocol was also arrested in the Netherlands, which drew huge criticism from crypto privacy advocates.
However, crypto privacy players are giving it back to regulators. Coin Center, the crypto think tank recently sued the Office of Foreign Assets Control (OFAC) for sanctions. Jerry Brito, Executive Director of Coin Center, said:
Not only are we fighting for the right to privacy, but if this precedent is maintained, OFAC could add entire protocols like Bitcoin or Ethereum to the sanctions list in the future, thus banning them immediately without any public procedure. . This cannot go unchallenged.