Monero’s XMR token has fallen to its lowest point against Bitcoin in the last eight years amid regulatory pressure on privacy-focused blockchain networks.
According to CoinMarketCap data, the XMR-BTC chart reached as low as 0.001954 BTC today, down 50% on the year-to-date metric. Moreover, the digital asset’s US dollar value has also been struggling, falling by more than 20% in the past year to less than $120 as of press time.
Nevertheless, Monero developers are intensifying efforts to enhance the network privacy features despite the regulatory challenges.
FCMP
A recent announcement on its website unveiled a novel privacy mechanism, “Full-Chain Membership Proofs (FCMP),” designed to supplant the current Rings system. While the Rings system secures sender privacy, it’s marred by vulnerabilities like EAE attacks, chain reorganization complications, and susceptibility to statistical analysis.
FCMP eliminates these risks, ensuring comprehensive user anonymity. It added:
“Full-Chain Membership Proofs prove the output spent is one of any output on the chain, effectively removing all of these risks. This means every input goes from an immediate anonymity set of 16 to 100,000,000.”
Notably, two significant proposals have emerged for implementing FCMPs. The first proposal aligns with the forthcoming Seraphis upgrade, aiming to bolster efficiency and privacy with tailored proofs. Meanwhile, the second proposal, devised as a countermeasure to spam attacks, introduces functionalities like transaction chaining, outgoing view keys, and forward secrecy autonomously from Seraphis.
Privacy under attack
Monero’s network reinforcement efforts coincide with heightened regulatory scrutiny on privacy-focused crypto tools.
US Treasury Deputy Secretary Adewale Adeyemo noted the exploitation of anonymity-enhancing tools like mixers by terrorist organizations and rogue states like North Korea to obscure the origins of illicit digital assets.
In a bid for compliance, the US government initiated legal actions against developers of Tornado Cash, a crypto-mixing service. More recently, the government arrested the co-founders of Samourai Wallet, a privacy-oriented service provider, for allegedly operating an unlicensed money transmission business.
Consequently, several crypto platforms, including Binance and OKX, have delisted privacy-focused digital assets from their platforms to comply with the evolving regulatory standards.
Despite these developments, prominent figures in the crypto space, including Ethereum co-founder Vitalik Buterin, have continued to advocate for the sector’s legitimacy and innovation.
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