[runnerup]

Theoretically…yes. In actuality governments can make it impossible to exchange Monero for USD/fiat which would render it fairly useless (at scale, anyways).

This is already being frameworked. “Coffee shop” sales of cryptocurrency (even BTC) is now de facto illegal in the USA. You can’t post a Craigslist ad saying “hey I have 100 BTC willing to exchange for USD”. The feds will (and have!!) arrest you for violating AML/KYC.

XMR is currently being considered for an “asset non-grata” classification where any exchange doing USD/XMR transactions would be held accountable for facilitating money laundering because participation in XMR inherently assists in laundering money.

[__MatrixMan__]

I question the feds' ability to pull this off.

Suppose I buy a bored ape or whatever, and then I sell it, and then the person I sold it to uses one of those non-KYC exchanges to buy XMR. How are the feds going to know whether it was me on both sides or not?

Are they going to correlate my IP to McDonalds wifi and subpoena the security footage and get me via facial recognition? At some point it's just too expensive to chase down.

[runnerup]

The feds will simply sanction any institution which allows XMR to be converted to fiat. The US government has ultimate control over global finance for now, although that iron grip is being weakened with Russia/China's alternative to SWIFT/etc. However, China has already banned XMR domestically.

US financial sanctions are very intense. The bank/instution that is converting fiat to XMR would be a complete pariah, unable to participate in any global banking or have any transactions with any bank which needs to participate with other global banks.

If you are an institution selling XMR and taking peoples fiat, you would have nowhere to store the fiat. You would have no one (Stripe/Visa/SWIFT/ACH/PayPal/etc) who would process those payments. You would be unable to travel to any western country. Anyone who does business with you could also get similar sanctions.

You could perhaps trade XMR<->ETH or something like that...but eventually someone with the XMR will want to convert it to fiat, and that would not be possible. Anyone doing a lot of BTC/ETH<->XMR trades could be found via blockchain analysis, and similarly investigated and prosecuted for participating in XMR, because XMR facilitates money laundering.

[RealityVoid]

The chain paper money -> KYC exchange -> BTC -> DEX -> XMR and viceversa is still valid and I don't think it's breakable by the feds.

[tsimionescu]

They could easily ban any BTC traded by a DEX that offers BTC/XMR exchanges, and any BTC that comes from a pool that also contains money that participated in this etc.

If the US government wants to ban an XMR, it can ban XMR.

[__MatrixMan__]

I don't think it would be so easy. How does the government figure out which addresses go with the DEX offering BTC/XMR?

I suppose if they could buy XMR with BTC and see which output addresses were involved with that transaction--those would be addresses controlled by users of the DEX. And then they could buy BTC with XMR, harvesting a few more addresses.

But if they run analysis like that continually they're going to end up paying a lot of money to the DEX in fees.

In fact, the exchange might not even need real users at all. They can just generate enough noise to attract the government's attention, and then soak up the government's money while letting the government spy on a bunch of robot activity.

It's gotta be one of these:

- ban crypto entirely

- give up on drug prohibition

- burden taxpayers with an endless game of whack-a-mole which slowly transfers value out of the US economy without achieving meaningful enforcement goals

I've got a guess about which one it will be.

[tsimionescu]

Doesn't the DEX have a specific wallet (or several) that you send/receive crypto to/from, on the ETH or BTC chains? If so, then it's easy to ban anyone from interacting with a DEX which advertises XMR. You don't just ban those who traded XMR with the DEX (which is costly), you ban anyone interacting with it at all (which should be easy to check on the classical block chains).

[notch898a]

Lol so if I send BTC to a friend overseas and they use it on their ancapworld exchange or whatever that is legal in their 3rd world shithole, then suddenly that BTC is banned from ever entering the first world again?

The only way I see this kind of works is if they ban crypto in general, and then ban cash in the mail too. Oh yeah and ban foreign trade, because as long as it's legal somewhere else you can spend XMR in THAT country in the form of importing goods to the US and then sell those goods for cash. We're talking about bits in the ether, and unlike with bitcoin at least to our knowledge the public ledger is not traceable. Seems like a tall order.

[tsimionescu]

Yes, they could declare any exchange that offers XMR to customers as banned, and no financial institution that trades with that exchange would be allowed to trade with a US bank. That's how US sanctions typically work. Most likely, that exchange would quickly stop offering XMR trades itself.

And even if they didn't, that BTC could indeed no longer be allowed in the US controlled banking system (which is far larger than the West).

Of course, if your friend were able to redeem buy actual goods for XMR and send those back to you, great. But what goods vendor would want to own XMR in a world where no institution that does business with banks would want it?

Note that what I'm saying is not purely theoretical - this is the status of Tornado Cash - where they went so far as to arrest developers of that. And banned BTC also exist - there are BTC that are illegal to own, and wallet addresses that are illegal to trade with.

[runnerup]

> then ban cash in the mail too

I mean, yeah this is already done. Over $10,000 requires you to file a FinCEN Form 105. The point isn't "you can't send money" its "The US government only wants to allow systems to exist in which it knows who/what/when/where about any non-trivial sized transaction."

If there's an auditable/subpoenable record, they're happy. If not, they're not. Right now they're "not happy" about XMR. Some day they'll ban it.

As for ETH/BTC<-> XMR they'll probably ban that too. Not from a technical perspective but more like "if we catch you sending ETH to that Russian XMR exchange we'll prosecute you."