Key takeaways

Privacy coins are just a step in a broader laundering pipeline after hacks. They serve as a temporary black box to disrupt traceability.

Hackers typically move funds through consolidation, obfuscation and chain hopping and only then introduce privacy layers before attempting to cash out.

Privacy coins are most useful immediately after a hack because they reduce onchain visibility, delay blacklisting and help break attribution links.

Enforcement actions against mixers and other laundering tools often shift illicit flows toward alternative routes, including privacy coins.

After crypto hacks occur, scammers often move stolen funds through privacy-focused cryptocurrencies. While this has created a perception of hackers preferring privacy coins, these assets function as a specialized “black box” within a larger laundering pipeline. To understand why privacy coins show up after hacks, you need to take into account the process of crypto laundering.

This article explores how funds move post-hack and what makes privacy coins so useful for scammers. It examines emerging laundering methods, limitations of privacy coins like Monero (XMR) and Zcash (ZEC) as laundering tools, legitimate uses of privacy technologies and why regulators need to balance innovation with the need to curb laundering.

How funds flow after a hack

Following a hack, scammers don’t usually send stolen assets directly to an exchange for immediate liquidation; instead, they follow a deliberate, multi-stage process to obscure the trail and slow down the inquiry:

Consolidation: Funds from multiple victim addresses are transferred to a smaller number of wallets.

Obfuscation: Assets are shuffled through chains of intermediary crypto wallets, often with the help of crypto mixers.

Chain-hopping: Funds are bridged or swapped to different blockchains, breaking continuity within any single network’s tracking tools.

Privacy layer: A portion of funds is converted into privacy-focused assets or routed through privacy-preserving protocols.

Cash-out: Assets are eventually exchanged for more liquid cryptocurrencies or fiat through centralized exchanges, over-the-counter (OTC) desks or peer-to-peer (P2P) channels.

Privacy coins usually enter the stage in steps four or five, blurring the traceability of lost funds even more after earlier steps have already complicated the onchain history.

Why privacy coins are attractive for scammers right after a hack

Privacy coins offer specific advantages right at the time when scammers are most vulnerable, immediately after the theft.

Reduced onchain visibility

Unlike transparent blockchains, where the sender and receiver and transaction amounts remain fully auditable, privacy-focused systems deliberately hide these details. Once funds move into such networks, standard blockchain analytics lose much of their efficacy.

In the aftermath of the theft, scammers try to delay identification or evade automated address blacklisting by exchanges and services. The sudden drop in visibility is particularly valuable in the critical days after theft when monitoring is most intense.

Breaking attribution chains

Scammers tend not to move directly from hacked assets into privacy coins. They typically use multiple techniques, swaps, cross-chain bridges and intermediary wallets before introducing a privacy layer.

This multi-step approach makes it significantly harder to connect the final output back to the original hack. Privacy coins act more as a strategic firebreak in the attribution process than as a standalone laundering tool.

Negotiating power in OTC and P2P markets

Many laundering paths involve informal OTC brokers or P2P traders who operate outside extensively regulated exchanges.

Using privacy-enhanced assets reduces the information counterparties have about the funds’ origin. This can simplify negotiations, lower the perceived risk of mid-transaction freezes and improve the attacker’s leverage in less transparent markets.

Did you know? Several early ransomware groups originally demanded payment in Bitcoin (BTC) but later switched to privacy coins only after exchanges began cooperating more closely with law enforcement on address blacklisting.

The mixer squeeze and evolving methods of laundering

One reason privacy coins appear more frequently in specific time frames is enforcement pressure on other laundering tools. When law enforcement targets particular mixers, bridges or high-risk exchanges, illicit funds simply move to other channels. This shift results in the diversification of laundering routes across various blockchains, swapping platforms and privacy-focused networks.

When scammers perceive one laundering route as risky, alternative routes experience higher volumes. Privacy coins gain from this dynamic, as they offer inherent transaction obfuscation, independent of third-party services.

Limitations of privacy coins as a laundering tool

Privacy features notwithstanding, most large-scale hacks still involve extensive use of BTC, Ether (ETH) and stablecoins at later stages. The reason is straightforward: Liquidity and exit options are important.

Privacy coins generally exhibit:

These factors complicate the conversion of substantial amounts of crypto to fiat currency without drawing scrutiny. Therefore, scammers use privacy coins briefly before reverting to more liquid assets prior to final withdrawal.

Successful laundering involves integration of privacy-enhancing tools with high-liquidity assets, tailored to each phase of the process.

Did you know? Some darknet marketplaces now list prices in Monero by default, even if they still accept Bitcoin, because vendors prefer not to reveal their income patterns or customer volume.

Behavioral trends in asset laundering

While tactical specifics vary, blockchain analysts generally identify several high-level “red flags” in illicit fund flows:

Layering and consolidation: Rapid dispersal of assets across a vast network of wallets, followed by strategic reaggregation to simplify the final exit.

Chain hopping: Moving assets across multiple blockchains to break the deterministic link of a single ledger, often sandwiching privacy-enhancing protocols.

Strategic latency: Allowing funds to remain dormant for extended periods to bypass the window of heightened public and regulatory scrutiny.

Direct-to-fiat workarounds: Preferring OTC brokers for the final liquidation to avoid the robust monitoring systems of major exchanges.

Hybrid privacy: Using privacy-centric coins as a specialized tool within a broader laundering strategy, rather than as a total replacement for mainstream assets.

Contours of anonymity: Why traceability persists

Despite the hurdles created by privacy-preserving technologies, investigators continue to secure wins by targeting the edges of the ecosystem. Progress is typically made through:

Regulated gateways: Forcing interactions with exchanges that mandate rigorous identity verification

Human networks: Targeting the physical infrastructure of money-mule syndicates and OTC desks

Off-chain intelligence: Leveraging traditional surveillance, confidential informants and Suspicious Activity Reports (SARs)

Operational friction: Exploiting mistakes made by the perpetrator that link their digital footprint to a real-world identity.

Privacy coins increase the complexity and cost of an investigation, but they cannot fully insulate scammers from the combined pressure of forensic analysis and traditional law enforcement.

Did you know? Blockchain analytics firms often focus less on privacy coins themselves and more on tracing how funds enter and exit them since those boundary points offer the most reliable investigative signals.

Reality of legitimate use for privacy-enhancing technologies

It is essential to distinguish between the technology itself and its potential criminal applications. Privacy-focused financial tools, such as certain cryptocurrencies or mixers, serve valid purposes, including:

Safeguarding the confidentiality of commercial transactions, which includes protecting trade secrets or competitive business dealings

Shielding individuals from surveillance or monitoring in hostile environments

Reducing the risk of targeted theft by limiting public visibility of personal wealth.

Regulatory scrutiny isn’t triggered by the mere existence of privacy features, but when they are used for illicit activity, such as ransomware payments, hacking proceeds, sanctions evasion or darknet marketplaces.

This key distinction makes effective policymaking difficult. Broad prohibitions risk curtailing lawful financial privacy for ordinary users and businesses while often failing to halt criminal networks that shift to alternative methods.

Balancing act of regulators

For cryptocurrency exchanges, the recurring appearance of privacy coins in post-hack laundering flows intensifies the need to:

Enhance transaction monitoring and risk assessment

Reduce exposure to high-risk inflows

Strengthen compliance with cross-border Travel Rule requirements and other jurisdictional standards.

For policymakers, it underscores a persistent challenge: Criminal actors adapt more quickly than rigid regulations can evolve. Efforts to crack down on one tool often displace activity to others, turning money laundering into a dynamic, moving target rather than a problem that can be fully eradicated.

Key takeaways

Dubai does not criminalize privacy coins yet has ordered them to be removed from regulated financial channels. This means licensed firms in the DIFC can no longer trade, promote or package them into investment products.

From a compliance perspective, privacy-by-default features conflict with AML and sanctions frameworks that require transaction visibility, making certain tokens structurally incompatible with regulated intermediaries.

The policy reflects a broader global trend, as regulators in Europe, the US and parts of Asia are also restricting privacy-focused assets on licensed crypto platforms and within financial institutions.

Dubai’s decision signals that future growth in regulated crypto will prioritize financial transparency, while privacy-centric innovation is likely to remain outside institutional capital markets.

Dubai has spent years positioning itself as a hub for regulated digital finance. Yet its restrictions on privacy coins such as Monero (XMR) and Zcash (ZEC) clarify where the emirate is drawing the line between innovation and compliance.

In January 2026, the Dubai Financial Services Authority (DFSA) prohibited anonymity-focused virtual currencies like Monero and Zcash from use on licensed venues within the Dubai International Financial Centre (DIFC). The policy applies to trading, marketing and fund-related activities conducted by DFSA-authorized firms. While residents may still hold privacy coins in personal wallets, regulated crypto exchanges and financial institutions operating in the DIFC can no longer facilitate their use.

This choice has reignited an old debate in crypto circles: How much privacy can regulated markets allow?

This article discusses the scope of Dubai’s ban on privacy tokens, the views of regulators on these tokens and why Dubai’s step reflects a global pattern. It points out how market reaction highlighted a growing divide and what Dubai’s decision may individually indicate.

What the Dubai ban covers

The DFSA rule is not a country-wide ban on privacy coins in the United Arab Emirates. Rather, it applies only to financial services provided “in or from” the DIFC, a distinct economic zone that operates under its own legal and regulatory system.

Under this new rule, firms regulated by the DFSA may not offer any services connected to privacy tokens or privacy-enhancing crypto protocols. The ban covers the listing of tokens such as Monero and Zcash, facilitating their trading, advertising them or including them in regulated investment products.

Significantly, the rule does not make ownership of Monero and Zcash illegal. Individuals remain free to hold privacy coins in self-custody or engage with decentralized networks beyond the regulated scope. The key change affects access via compliant, institution-oriented platforms.

Meanwhile, the DFSA has placed greater responsibility on licensed firms. Rather than depending exclusively on regulator-approved whitelists, firms must now perform their own evaluations of token suitability and compliance.

Did you know? Monero has no fixed supply cap. After its initial emission phase ended, it switched to a “tail emission” that adds a small, permanent block reward to keep miners incentivized. This was designed to prevent long-term security risks seen in fixed-supply networks.

Why regulators view privacy tokens differently

The DFSA focuses on Anti-Money Laundering (AML) and sanctions compliance. Global standards established by organizations like the Financial Action Task Force (FATF) require financial intermediaries to identify counterparties, monitor transactions and report suspicious activity.

Privacy coins are built to make such tasks difficult or impossible. Monero employs ring signatures and stealth addresses to hide transaction flows. Zcash, when shielded transactions are used, conceals senders, receivers and amounts.

From a regulator’s viewpoint, this creates a fundamental conflict. Features of privacy tokens eliminate visibility, which puts them at odds with compliance requirements. Even sophisticated blockchain analytics cannot consistently trace transactions on certain privacy networks. As global enforcement of sanctions and compliance has grown stricter, regulators have increasingly discouraged opaque financial channels.

A global pattern, not an isolated move

Dubai’s decision aligns with a wider global regulatory approach to restricting crypto tokens that promote anonymity.

In the European Union, while privacy coins are not outright banned under the core Markets in Crypto-Assets Regulation (MiCA) framework, the new EU Anti-Money Laundering Regulation will effectively prohibit privacy coins like Monero and Zcash on regulated EU exchanges by July 1, 2027.

In the US, attention has targeted not only tokens but also privacy infrastructure. The 2025 prosecution of Tornado Cash co-founder Roman Storm intensified discussion over whether developers of open-source, non-custodial privacy tools can face liability for their use. Regulators around the world are increasingly targeting systems that reduce transaction traceability.

Even when privacy tools do not face an explicit ban, regulatory systems are increasingly designed around the premise that financial intermediaries must identify users and track transaction flows.

Did you know? Zcash transactions can be transparent or private. Users can choose between public addresses and shielded addresses, unlike fully private-by-default networks.

Market reaction highlights a growing divide

The price of privacy tokens increased sharply around the time of the DFSA announcement. Monero and Zcash both posted gains, and ZEC remained among the strongest-performing assets of the previous year.

Monero jumped approximately 20% on Jan. 12, 2026, reaching a peak of about $595, while Zcash posted moderate double-digit gains during the same period. Privacy tokens generally outperformed the broader market as traders shifted toward secrecy-oriented digital currencies.

Monero also traded near $579 during the rally, spearheading a surge in privacy-centric coins as investors moved into higher-beta instruments. According to researchers at 10x Research, Monero has benefited from an increased emphasis on anonymity despite regulatory pressure. Zcash and other privacy-related projects rose as well, continuing a trend that began in December 2025 as liquidity improved and participants returned to risk.

These developments reveal a fundamental division in crypto markets:

Regulated access channels are becoming more limited, particularly for assets that hinder compliance efforts.

Unregulated and decentralized channels continue to enable privacy-focused assets, often drawing users who prioritize financial privacy or resistance to censorship.

Trading of privacy tokens may increasingly take place beyond traditional exchange platforms, while many institutions limit themselves to fully regulated assets such as Bitcoin (BTC), Ether (ETH) and regulated stablecoins.

This division could transform the way capital moves through crypto markets, with distinct asset classes serving very different user groups.

What this means for exchanges and crypto firms

For exchanges operating in financial hubs like Dubai, regulatory clarity has dual effects. While it limits certain offerings, it also reduces uncertainty around compliance requirements.

Companies seeking licenses in regulated jurisdictions must now expect that assets with built-in obfuscation features are unlikely to gain approval. Token listings will increasingly be assessed not only on market demand but also on parameters such as traceability, auditability and compatibility with travel-rule reporting.

This scenario may help shape token design. Developers aiming for institutional adoption may favor transparent architectures, optional privacy layers or compliance-friendly zero-knowledge tools in place of opaque transaction models.

At the same time, privacy-first projects may find themselves structurally excluded from regulated financial infrastructure, driving them further toward peer-to-peer ecosystems.

Did you know? Several major exchanges delisted privacy coins years ago. Platforms in South Korea, Japan and parts of Europe began removing Monero and Zcash as early as 2019 due to local AML guidance, well before newer global frameworks like MiCA.

Privacy vs. compliance: An unresolved policy conflict

Policymakers do not agree with the view that privacy should automatically signal criminal risk. During the US Securities and Exchange Commission (SEC) crypto roundtable in late 2025, Commissioner Hester Peirce argued that monetary tracking methods designed for conventional finance might not apply precisely to distributed networks. She warned against treating privacy-preserving software itself as evidence of misconduct.

From that perspective, privacy tools are seen as legitimate safeguards against data breaches, corporate surveillance and financial profiling, rather than inherently criminal infrastructure. However, regulators must operate within political and legal constraints. Sanctions enforcement, terrorist financing controls and fraud prevention remain high-priority mandates, and privacy-oriented technologies complicate those objectives.

While compliance structures depend on transaction monitoring, fully private financial rails are likely to remain incompatible with regulated finance.

What Dubai’s decision ultimately signals

Dubai’s restriction on privacy coins does not signal their end. However, it underlines a key structural fact in the current crypto landscape. Regulated financial systems are now designed around transparency requirements.

Whether in Dubai, Europe or the US, policymakers are aligning toward a framework where institutional crypto markets mirror traditional finance in compliance structure. Identity verification, transaction traceability and reporting obligations are becoming fundamental requirements.

Privacy-oriented networks may keep growing in decentralized environments, but they are deliberately kept away from regulated capital markets, investment vehicles and institutional liquidity.

For users and developers, the takeaway goes beyond mere legality; it concerns the spaces where various forms of crypto activity can achieve meaningful scale.

Dubai’s action demonstrates not a rejection of crypto itself, but a tighter definition of which crypto activities belong within regulated finance. The eventual outcome may lead to a sharper division in the crypto economy — one built for compliance and another built for censorship resistance.

Key points:

Bitcoin remains under pressure as the bears attempt to hold the price below the crucial $74,508 level.

Several major altcoins are struggling to bounce off their support levels, increasing the likelihood of the resumption of the downtrend.

Bitcoin (BTC) bulls attempted to start a recovery, but the bears sold at higher levels and pulled the price below $72,169. Galaxy Digital research lead Alex Thorn said in a note on Monday that BTC may plunge to its realized price of $56,000 over the coming weeks due to the lack of catalysts to reverse the trend.

Not everyone is bearish on BTC as select analysts anticipate a bottom soon. Bitwise chief investment officer Matt Hougan said in an article on X that the crypto markets are likely to “come roaring back sooner rather than later.” 

However, according to one historical pattern, BTC’s recovery may take time. Crypto proponent Brett said in a post on X that BTC has closed below the 100-week simple moving average (SMA). During previous instances of a break below the 100-week SMA, BTC stayed below the level for 182 to 532 days. The only outlier was the 2020 COVID-19 flash crash when BTC rose back above the 100-week SMA in 35 days.

Could BTC and the major altcoins start a relief rally, or will the support levels give way? Let’s analyze the charts of the top 10 cryptocurrencies to find out.

Bitcoin price prediction

Buyers are struggling to hold BTC above the critical $74,508 support, indicating aggressive selling by the bears.

If Bitcoin price continues lower and slips below $72,945, it signals the resumption of the downtrend. The BTC/USDT pair may then collapse to the strong support at $60,000.

The relative strength index (RSI) is in the oversold zone, suggesting that the selling may have been overdone in the near term. That increases the likelihood of a relief rally, which may pick up pace on a close above the $79,500 resistance. If that happens, the pair may rally toward the breakdown level of $84,000.

Ether price prediction

Ether (ETH) took support at the crucial $2,111 level on Tuesday, but the shallow bounce suggests a lack of aggressive buying by the bulls.

The sellers are attempting to resume the downtrend by pulling the Ether price below the $2,111 support. If they manage to do that, the ETH/USDT pair may plummet to $1,750.

The RSI in the oversold zone points to a possible relief rally in the near term. The pair may rise to the 38.2% Fibonacci retracement level of $2,467 and then to the 20-day exponential moving average (EMA) ($2,712). A close above the 20-day EMA suggests that the bulls are back in the game.

BNB price prediction

BNB (BNB) continues to trade below the $790 level, increasing the risk of a drop below the $730 level.

If the BNB price closes below the $730 level, it signals that the bears have flipped the $790 level into resistance. The BNB/USDT pair may plunge to $700 and subsequently to $645.

Time is running out for the bulls. They will have to defend the $730 level and swiftly push the price above the $790 resistance to prevent the downward move. The pair may then climb to the 20-day EMA ($839).

XRP price prediction

The failure of the bulls to maintain XRP (XRP) above the $1.61 level shows that the bears are selling on minor relief rallies.

Sellers will attempt to sink the XRP price below the support line of the descending channel pattern. If they can pull it off, the XRP/USDT pair may retest the Oct. 10, 2025, low of $1.25.

On the upside, the bulls will have to drive the price above the 20-day EMA ($1.79) to suggest that the pair may remain inside the channel for some more time. A close above the downtrend line signals a potential short-term trend change.

Solana price prediction

The failure of the bulls to push Solana (SOL) above the $107 level renewed selling, pulling the price below the crucial $95 support.

If the Solana price closes below $95, it signals the start of the next leg of the downtrend. The SOL/USDT pair may then tumble to $79.

Contrary to this assumption, if the price turns up and breaks above $107, it suggests that the break below the $95 level may have been a bear trap. The pair may then rise to the 20-day EMA ($117), where the bears are expected to step in. Buyers will have to clear the moving averages to indicate that the bearish momentum is weakening.

Dogecoin price prediction

Dogecoin (DOGE) is attempting to start a recovery, but the shallow bounce shows that the bears continue to exert pressure. 

If the Dogecoin price turns down from the current level or the 20-day EMA ($0.12) and breaks below $0.10, it signals the resumption of the downtrend. The DOGE/USDT pair may then nosedive to the $0.08 level.

Contrary to this assumption, if the price turns up and breaks above the moving averages, it signals that the market has rejected the break below the $0.12 level. The pair may then rally to $0.16.

Cardano price prediction

Cardano (ADA) is attempting to bounce off the support line of the descending channel pattern, but the relief rally lacks strength.

If the Cardano price turns down from the current level or the 20-day EMA ($0.33), it suggests that the bears retain the advantage. Sellers will then again attempt to sink the ADA/USDT pair below the support line and extend the decline to $0.20.

Contrary to this assumption, if buyers push the price above the 20-day EMA, the pair may reach the downtrend line. A close above the downtrend line opens the gates for a rally to the breakdown level of $0.50. 

Related: Bitcoin’s $68K trend line seen as potential BTC price floor: Traders

Bitcoin Cash price prediction

Bitcoin Cash’s (BCH) recovery is facing resistance near the 50% retracement level of $535, indicating that the bears are active at higher levels.

Sellers will attempt to pull the Bitcoin Cash price below the $497 level, which is an important level to watch out for. If the level gives way, the BCH/USDT pair may descend to $467 and then to $443.

Contrarily, if buyers drive the price above $544, the pair may jump to the 20-day EMA ($562). Sellers are expected to mount a strong defense at the 20-day EMA, but if the bulls prevail, the pair may rise toward $604.

Hyperliquid price prediction

Hyperliquid (HYPE) pierced the $35.50 resistance on Tuesday but the long wick on the candlestick shows selling at higher levels.

If buyers do not give up much ground to the bears, the prospects of a break above the $35.50 level increase. If that happens, the HYPE/USDT pair may surge to $44. Such a move signals that the corrective phase may be over.

Instead, if the Hyperliquid price turns down sharply from the current level and breaks below the 20-day EMA ($28.79), it suggests that the pair may continue to oscillate between $35.50 and $20.82 for a while longer.

Monero price prediction

Monero (XMR) is attempting to take support at the $360 level, but the relief rally is likely to face selling at $412 and then at the 20-day EMA ($461).

If the Monero price turns down from the current level or the overhead resistance, it signals that the sentiment remains negative and traders are selling on rallies. That puts the $360 level in danger of breaking down. The next support on the downside is at $320.

On the contrary, if buyers push the price above the 20-day EMA, the XMR/USDT pair may rise to $500. Buyers are expected to face significant selling at the $500 level. Generally, after a sharp decline, the price tends to consolidate for some time before making the next directional move. 

Cryptocurrency markets posted a broad recovery this week, led by gains in major coins, even as investor attention remained focused on the uncertainty of pending US crypto legislation.

Bitcoin (BTC) rose over 5% during the past week to top the $95,000 mark, while Ether (ETH) pumped by around 6.6% on developments related to the top Ethereum treasury companies.

US spot Bitcoin exchange-traded funds (ETFs) also returned with a bang, with the funds logging four consecutive days of net positive inflows of around $1.7 billion in total, according to Farside Investors.

Despite the price recovery, market sentiment was shaped by developments in Washington. US Senator Cynthia Lummis said the Senate Banking Committee is expected to delay its markup of the long-anticipated CLARITY Act, legislation aimed at establishing a market structure framework for digital assets.

Coinbase CEO Brian Armstrong was among those who expressed concerns over multiple provisions related to tokenized equities and decentralized finance in the existing draft legislation.

Senator Lummis expects delay to crypto market structure markup: Bloomberg

US Senator Cynthia Lummis reportedly expects the US Senate Banking Committee to delay its hearing on crypto market structure legislation after Coinbase withdrew support for the bill.

There were already some murmurs of a CLARITY Act Senate markup delay on Wednesday, which were heightened following an X post from Bloomberg reporter Steven Dennis on Wednesday night. Dennis stated:

“Lummis tells me her recommendation and expectation is that the markup be pulled for now. It’s Banking Chair Tim Scott’s call.”

The Senate markup was scheduled for Thursday at 10:00 am Eastern Time.

Cointelegraph reached out to Scott’s office for comment, but didn’t receive an immediate response.

Lawmakers have been consulting with members of the banking and crypto industries over provisions of the CLARITY Act for several weeks.

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BitMine to invest $200 million in YouTuber MrBeast’s Beast Industries

BitMine Immersion Technology has agreed to invest $200 million in Beast Industries, the entertainment company founded by YouTube star Jimmy Donaldson, better known as MrBeast, in a deal that marks one of BitMine’s biggest non-core equity investments to date.

BitMine will make a $200 million equity investment into Beast Industries, the company announced on Thursday. 

Donaldson operates a network of YouTube channels that collectively have more than 450 million subscribers, according to publicly available figures.

“MrBeast and Beast Industries, in our view, is the leading content creator of our generation, with a reach and engagement unmatched with GenZ, GenAlpha and Millennials,” said Thomas Lee, the chairman of BitMine. “Beast Industries is the largest and most innovative creator based platform in the world and our corporate and personal values are strongly aligned.”

The company did not disclose the size of the stake BitMine will acquire, the valuation of Beast Industries or any governance rights tied to the investment

The companies said the deal is expected to close on Monday.

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Perp DEXs will “eat” expensive TradFi in 2026: Delphi Digital

Perpetual decentralized exchanges (DEXs) are gaining traction as traders turn to blockchain-based platforms that promise lower costs and fewer intermediaries than traditional centralized venues.

Perp DEXs are blockchain-based venues for trading perpetual futures contracts, allowing traders to bet on the underlying asset’s price with leverage and without an expiry date.

Crypto research firm Delphi Digital said in its outlook for 2026 that perp DEXs are poised to continue taking market share from traditional finance products. It argued that decentralized infrastructure is structurally more efficient than legacy systems, which it described as fragmented and expensive to operate.

“Now Hyperliquid is building native lending. Perp DEXs could become brokerage, exchange, custodian, bank, and clearinghouse all at once,” wrote Delphi Digital in a Tuesday X post, adding that competitors such as Aster, Lighter and Paradex are “racing to catch up.”

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Trump-linked World Liberty brings $3.4 billion stablecoin into crypto lending markets

World Liberty Financial, a decentralized finance project linked to the family of US President Donald Trump, has entered the cryptocurrency lending market, highlighting renewed interest in onchain credit as regulatory clarity improves.

The new product, called World Liberty Markets, launched on Monday and allows users to borrow and lend digital assets, according to a Bloomberg report. The platform is built around USD1, World Liberty’s US dollar–backed stablecoin, alongside its governance token, WLFI.

Users can post collateral, including Ether, a tokenized version of Bitcoin, and major stablecoins such as USD Coin (USDC) and Tether (USDT). The platform is designed to support both lending and borrowing activity within a single onchain marketplace.

World Liberty co-founder Zak Folkman told Bloomberg that additional collateral types will be added over time, potentially including tokenized real-world assets (RWAs). He also said the company is exploring partnerships with prediction markets, cryptocurrency exchanges and real estate platforms.

The lending rollout follows World Liberty’s recent application for a national trust bank charter with the US Office of the Comptroller of the Currency. The company has said the charter would support broader adoption of USD1, which is already being used for cross-border payments and treasury operations.

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DeFi quietly breaks up with Discord as scams overwhelm public channels

Decentralized finance (DeFi) protocols are abandoning public Discord servers, arguing that the platform has become more of a liability than a community hub. 

The shift drew attention on Wednesday after DeFi lending protocol Morpho said it had moved its public Discord server into read-only mode, directing users instead to alternative support channels. The move reflects growing concern that Discord has become a favored hunting ground for scammers targeting crypto users.

The concern is not limited to Morpho. DeFi data platform DefiLlama’s pseudonymous founder 0xngmi said they have been quietly reducing their reliance on Discord, favoring more controlled communication tools. 

Several builders say the goal is to move away from always-on chat rooms toward structured support systems designed to protect users rather than maximize engagement.

Source: Anton Cheng

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DeFi market overview

According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the green.

The privacy-preserving Dash (DASH) token rose 136% as the week’s biggest gainer, followed by the Monero (XMR) coin, up 49% during the past week.

Total value locked in DeFi. Source: DefiLlama

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.

Privacy-preserving cryptocurrency Monero surged to a new all-time high on Tuesday as tightening digital asset regulations contribute to heightened investor demand for privacy coins.

Monero (XMR) rose to a new all-time high above $687 on Tuesday, up around 14% over the past 24 hours, according to TradingView data.

Monero has gained roughly 45% in the past week, becoming the 12th largest crypto by market cap as the total market capitalization of privacy-focused coins rose by 3.5%, and trading volume soared 32%, CoinMarketCap data shows.

Privacy-focused cryptos have outperformed the wider cryptocurrency market during the past three months since the $19 billion crypto market crash in early October. 

Related: Standard Chartered said to plan crypto brokerage, trims ETH forecast

Industry watchers are pointing to tightening Know Your Customer (KYC) and Anti-Money Laundering (AML) rules as the main tailwinds driving investor demand.

Privacy-focused coins outperformed the broader market due to investor demand for “financial confidentiality” spurred by the rising “surveillance” in the digital economy and “increasing government scrutiny of crypto transactions,” Narek Gevorgyan, the founder and CEO of crypto portfolio management platform CoinStats, recently told Cointelegraph.

The European Union is also set to ban privacy coins and anonymous crypto accounts from 2027, as part of its sweeping new AML regulations, which will prohibit crypto service providers from handling coins such as XMR and Zcash (ZEC).

Related: Solana Policy Institute urges SEC to exempt DeFi developers from exchange rules

Crypto data platform warns of overheating XMR investor sentiment

Despite the positive price action, investors seeking a new “entry point” should consider the elevated levels of social media hype around XMR, warned crypto data platform Santiment in a Tuesday X post:

“If you are looking for an entry point, consider doing so after social hype and FOMO wear off slightly.”

Santiment’s chart shows that XMR development activity has been falling since the beginning of January, while XMR’s social media dominance peaked on Sunday.

Monero’s closest privacy-focused rival, Zcash, has also experienced sharp swings. ZEC rose by around 12-fold from a yearly low of $48 to a high of $744 on Nov. 7, 2025, a month after the record $19 billion market crash.

Zcash fell by around 21% in the past week due to slowing developer activity and a recent governance dispute between the Electric Coin Company, the main development team behind Zcash, and Bootstrap, the non-profit supporting the protocol.

Magazine: 2026 is the year of pragmatic privacy in crypto — Canton, Zcash and more

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

Key takeaways:

Monero (XMR) surged past the $500 mark for the first time since its peak in May 2021.

The privacy-focused cryptocurrency briefly touched $500.66 after rising more than 6% on Sunday and 20% over the past week. That brought it closer to its record high of around $517.50, established in April 2021.

Zcash leadership crisis contrasts with Monero rally

Monero’s ascent contrasted sharply with the turmoil engulfing its privacy coin rival, Zcash (ZEC).

On Wednesday, the Electric Coin Company (ECC) team behind Zcash resigned en masse, citing intolerable working conditions and board disputes over the project’s assets and direction.

The fallout exposed deep rifts in Zcash’s leadership, particularly involving the Bootstrap Project and funding allocations. ZEC’s price plummeted by over 20% days after the mass resignation, reaching a weekly low of around $360 over the weekend.

Monero also drew support from a wave of bullish institutional commentary.

In their latest reports, firms such as Grayscale and Coinbase highlighted privacy coins as a key growth theme, citing rising demand for financial confidentiality in an increasingly regulated crypto landscape.

Related: Crypto privacy in 2026: Compliance-friendly tools take center stage

With Zcash in flux, traders appeared to favor Monero as the cleaner privacy exposure.

Monero fractal indicates rally won’t last

As of January, XMR was on the cusp of price discovery while eyeing a breakout above its record high of around $517.50.

Similar breakout attempts occurred seven times in the past, each failing and followed by sharp corrections, ranging from roughly 40% to as much as 95%, toward an ascending trendline support.

XMR will risk entering a prolonged correction phase if history repeats, taking its price toward $200-270, an area aligning with the lower trendline support and prevailing Fibonacci retracement lines.

Conversely, a sustained breakout above the $500–$520 resistance would invalidate the bearish fractal.

In that scenario, XMR could follow the path of cryptocurrencies that broke out after multi-year consolidations in 2025, opening the door for a rally toward $775, a Fibonacci retracement line, and a new all-time high this year.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.

Bitcoin’s role as a non-sovereign risk asset may benefit from renewed investor focus amid a criminal investigation into US Federal Reserve Chair Jerome Powell.

Federal prosecutors opened a criminal investigation into Powell over testimony he gave to a Senate committee about renovations to the Fed’s buildings.

In a Sunday statement, Powell said the investigation is “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.” President Donald Trump has repeatedly attacked Powell and the Fed for refusing to grant his demands to cut interest rates.

The investigation introduces short-term political headwinds for all risk assets, particularly US equities. However, a “systemic correction” in equities may bring renewed demand for Bitcoin’s (BTC) “non-sovereign” attributes, according to analysts from crypto exchange Bitunix.

“When confidence in dollar credibility and central bank independence is questioned, decentralized assets tend to receive narrative-driven risk premia,” the analysts told Cointelegraph. “Over the long term, if political interference in monetary policy becomes structural, Bitcoin’s role as a “non-sovereign risk asset” is likely to be further reinforced.”

Related: Bitcoin holds $90K as ETFs wobble and institutions reposition: Finance Redefined

Bitcoin rose 0.85% over the last 24 hours, while privacy-preserving tokens Monero (XMR) rose 18% and Zcash (ZEC) rose 6.5% during the same period.

“This environment is literally what Bitcoin was created for,” said popular Bitcoin analyst Will Clemente.

“The President is coming after the Fed chair. Metals are ripping as sovereigns diversify reserves. Stocks & risk assets at record highs. Geopolitical risk rising,” said Clemente in a Monday X post.

Related: Zcash sees developer slowdown as ZEC extends two-month slide

Crypto investor sentiment signals local bottom; smart money not buying

Meanwhile, data from crypto platform Matixport is signaling a gradual improvement in crypto investor sentiment, which increases the probability of a crypto market recovery.

“The moving average of our Greed & Fear Index is forming a clear base, a condition that historically coincided with Bitcoin bottoming phase,” wrote Matrixport in a Monday X post.

Despite the improving sentiment, the industry’s most successful traders, tracked as “smart money” by Nansen, are still betting on a short-term decline in Bitcoin.

Smart money traders were net short on Bitcoin for a cumulative $127 million, with $1.6 million worth of shorts added in the past 24 hours, according to crypto intelligence platform Nansen.

Still, smart money was net long on Ether (ETH) price for $674 million and net long on XRP (XRP) for $72 million, signaling more upside expectations for these tokens.

Magazine: Would Bitcoin survive a 10-year power outage?

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Developer activity linked to the privacy-focused cryptocurrency Zcash has fallen to its lowest level in years, as a governance dispute and a prolonged price decline weigh on the project’s ecosystem.

Data from market intelligence company Santiment shared in a Thursday X post showed that developer activity tied to Zcash dropped to its weakest level since November 2021. Over the same period, the Zcash (ZEC) token has fallen about 40% over the past two months.

“Historically, rising development activity leads to standout altcoins being able to emerge above the pack. The opposite result holds true for those that ‘let off the gas’ and decline in their efforts to consistently innovate and improve,” said Santiment.

Related: Zcash governance in turmoil: How low can ZEC price go?

The slowing developer activity comes amid an ongoing governance dispute between the Electric Coin Company, the main development team behind Zcash, and Bootstrap, the non-profit supporting the protocol.

The Electric Coin Company recently said it would separate from Bootstrap and form a new company, citing what it described as “malicious governance actions,” Cointelegraph reported Thursday.

In its official response, Bootstrap said the board members engaged in discussions regarding “external investment and alternative structures to privatize” Zashi, the self-custodial crypto wallet built for private Zcash transactions.

On Thursday, the ECC developers announced that they are working on a new wallet, cashZ, which is set to launch in a “few weeks.”

Related: 2025 crypto bear market was ‘repricing’ year for institutional capital: Analyst

Zcash protocol’s open-source nature unaffected by dispute: Zcash Foundation

In its response to the governance incident, the Zcash Foundation assured investors that the privacy-preserving protocol will not be affected by the governance dispute, thanks to Zcash’s open-source codebase, which was designed for “resilience” so that no single party can control the protocol.

“This structure ensures that changes within a single organization or across many of them, while meaningful, do not compromise the integrity or continuity of the Zcash blockchain,” wrote the foundation in the response published on Thursday.

Despite the assurance, the Zcash token’s price fell 14% over the past week, and traded about $433 at the time of writing.

Still, whales were unfazed by the governance dispute, as they added a cumulative $1.17 million spot ZEC tokens across the past week, while fresh wallets added $2.14 million, according to crypto intelligence platform Nansen.

Privacy coin Zcash competitor Monero (XMR) surpassed ZEC’s market capitalization on Thursday, regaining its position as the leading privacy-preserving cryptocurrency, according to CoinMarketCap.

Magazine: 2026 is the year of pragmatic privacy in crypto — Canton, Zcash and more

Another eventful year for crypto is now behind us.

Bitcoin notched a new all-time high but ended the year in the red, the regulatory climate in the US warmed, privacy coins stormed the market, institutional adoption surged and the US president even launched a memecoin.

With 2026 now underway, Cointelegraph takes a look at some of the biggest comebacks in crypto last year and what it could mean for the next 12 months. 

Ross Ulbricht and CZ get presidential pardons 

The year kicked off with a presidential pardon of one of the biggest names from the early days of Bitcoin. 

After spending over 11 years in jail for his role in creating dark web marketplace Silk Road, Ross Ulbricht was pardoned by President Donald Trump from his double-life-time jail sentence and freed in late January.

The move gave Ulbricht a second chance at life, at what seemed like a slim chance at ever being able to live a normal life again.  

“Thank you so much, President Trump, for giving me this amazing blessing. I am so, so grateful to have my life back, to have my future back, to have this second chance. This is such an important moment for me and for my whole family,” Ulbricht said after receiving his pardon. 

This wasn’t the only pardon to a crypto figure Trump gave out in 2025. In October Binance co-founder Changpeng “CZ” Zhao (CZ) also received a similar honor.

Zhao completed a four-month prison sentence after pleading guilty in late 2023 to one count of violating the Bank Secrecy Act over a failure to implement an adequate Anti-Money Laundering (AML) program at Binance. 

While the pardon didn’t wipe off the admission of guilt by CZ, it marked an acknowledgement by the government that the Binance co-founder faced too harsh of a penalty, and cleared the way for CZ to get more involved in crypto again.   

“I don’t know him, I don’t believe I’ve ever met him, but I’ve been told he had a lot of support, and they said that what he did is not even a crime, it wasn’t a crime, he was persecuted by the Biden Administration,” Trump said of CZ’s pardoning. 

What this means for 2026: With crypto hostility dying down in the US in 2025, it opens the door for greater mainstream and institutional adoption, with entrepreneurs more comfortable dipping their toes into the industry as regulatory clarity grows.  

It also means that crypto firms and projects may feel more comfortable offering the full suite of their services in the US with less worry about sudden crackdowns or legal disputes.  

Privacy coins re-emerge: Zcash and Monero adapt and rally

Privacy coins stormed the market in 2025 and became one of the key themes in crypto this year as investors sought to keep their on-chain anonymity. 

Amid this boom, the price of Monero (XMR) climbed back up above $400 for the first time in four years, putting an end to a lengthy spell of flat price action.

While the asset didn’t breach a new all-time high, XMR closed the year with a gain of around 120% as per CoinGecko data, compared to Bitcoin which ended the year in the red. 

Zcash (ZEC), another privacy coin, closed 2025 with a whopping 817% gain, climbing above the $500 mark for the first time in seven years. 

What this means for 2026: Given that most blockchains are built around providing a public ledger of information, privacy-focused networks have further room for growth in 2026. 

In a recent report, crypto investment giant a16z highlighted this, arguing that privacy networks will have strong potential to retain users who value anonymity as they will not bridge out assets to public blockchains to avoid public data leaks. 

“When users are on private blockchains, on the other hand, the chain they choose matters much more because, once they join one, they’re less likely to move and risk being exposed,” a16z said, adding: 

“This creates a winner-take-most dynamic. And because privacy is essential for most real-world use cases, a handful of privacy chains could own most of crypto.”

Ripple grows after the SEC ends its lawsuit

After a lengthy, costly and highly contested legal battle with the Securities and Exchange Commission (SEC), Ripple Labs finally reached the end of a pivotal dispute for the crypto industry, after both Ripple and the SEC withdrew their final appeals in August. 

While it was confirmed in March that they still had to pay a $50 million civil settlement, the final ruling ultimately dismissed the core accusation that the firm had violated securities laws by issuing and selling XRP (XRP) to institutions. 

Related: How privacy prevailed in an otherwise dismal Q4 for crypto

Had the court ruling swayed the other way, it may have had a massive knock-on effect for the classification of many crypto asset, andspurredr additional cases against similar firms. 

The ruling provided a certain level of legal clarity for both Ripple and the broader ecosystem, and with the firm freed from having such a major court case hanging over its head, the firm was able to double down and grow its various initiatives. 

On the back of this, 2025 saw major growth in its On-Demand Liquidity (ODL) product and its stablecoin RLUSD, a $500 million funding round at a $40 billion valuation, and XRP also notched a new all-time high for the first time in seven years. 

What this means for 2026: On the back of Ripple’s momentum in 2025, the company looks primed for more growth in 2026. 

Analysts from banking giant Standard Chartered have predicted XRP in particular to skyrocket over 300% in price next year on the back of demand from spot XRP ETFs and the regulatory clarity the asset now has. 

Magazine: Bitcoin ‘never’ hit $100K in real terms, SEC’s crypto ‘dream team’: Hodler’s Digest, Dec. 21 – 27