Monero owners organize crypto bank to test exchanges

Monero

Image: Ulrich Baumgarten/Contributor

Community members for the privacy-focused cryptocurrency Monero plan to simultaneously withdraw their holdings from a series of exchanges in a bid to prove that the exchanges are selling Monero that they don’t actually own.

The self-proclaimed “Monerun” – as in bank run – is scheduled for Monday, April 18, which is also Monero’s 8th anniversary.

“April 18. We are removing XMR from exchanges. Any exchange that has not disabled withdrawals (which many of them already have), we are withdrawing our funds,” user “bawdyanarchist” wrote on Reddit on Thursday.

Do you know anything else about this massive withdrawal plan? We would love to hear from you. Using a non-work phone or computer, you can contact Joseph Cox securely on Signal on +44 20 8133 5190, Wickr on josephcox, OTR chat on [email protected] or email an email to [email protected]

The reason for this cascade is reminiscent of Monero’s privacy-enhancing features. While Bitcoin transactions are easily traceable on its blockchain, Monero is more resistant to tracking, which has made it attractive to cybercriminals although its adoption lags far behind Bitcoin and Ethereum. This resistance to tracking has led to the theory that exchanges are using opacity to sell Monero they don’t own and generate money for themselves, creating the need for some sort of community audit of their reservations.

“Monero’s dark ledger has allowed a number of exchanges to misrepresent their reserves and sell XMR that they don’t actually have, knowing that too many of us will never walk away, and no one can. see on-chain evidence of their misdeeds,” the post continues.

The plan with Monday’s massive withdrawal is to see which exchanges are honoring the massive amounts of withdrawal requests. If the withdrawals are successful, then the exchange apparently did nothing suspicious. If not, and the owners aren’t withdrawing their coins, perhaps the exchange never had the Monero to sell in the first place. This type of shadow money is what members of the Monero community have called “paper Monero”.

A Binance spokesperson told Motherboard in an emailed statement that “Binance has a strict internal policy that prohibits any use of user token holdings. We have an internal monitoring system to manage the reconciliation to ensure the blockchain balance is the same as the system balance. As the most liquid digital asset market in the world, this is not an issue we encounter on our platform.

“I’m really excited for these guys,” a member of a Monero-focused Telegram group said in a channel-wide message on Friday.

On Monday morning, some users were posting that they were withdrawing their Monero from exchanges and reporting whether or not they were successful. Some posts on r/Monero describe successful Kraken withdrawals, while other users have reported network congestion delaying Binance withdrawals.

Some have described buying Monero on an exchange just to withdraw it instantly. Monero’s 24-hour price is currently up 0.61% on Binance, and on Kraken, Monero’s price is up over 25%.

Update: This article has been updated to include a statement from Binance.

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