Monero Owners Are Staging a Crypto Bank Run to Test Exchanges

Monero

Image: Ulrich Baumgarten/Contributor

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

The self-described “Monerun”—as in bank run—is planned for Monday 18 April, which is also Monero’s 8th birthday. 

“April 18th. We’re withdrawing XMR from exchanges. Any exchange that hasn’t disabled withdraws (which many of them have already), we’re pulling our funds,” user “bawdyanarchist” wrote on Reddit on Thursday.

Do you know anything else about this mass withdrawal plan? We’d 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 jfcox@jabber.ccc.de, or email joseph.cox@vice.com.

The reason for this stunt calls back to Monero’s privacy-enhancing features. Whereas 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 tracking resistance has led to the theory that exchanges are using the opacity to sell Monero they don’t own and generate cash for themselves, creating the need for a kind of community-led audit of their reserves. 

“Monero’s obfuscated ledger has enabled a number of exchanges to misrepresent their reserves, and sell XMR that they don’t actually have, knowing that all too many of us will never withdraw, and no one can see onchain the evidence of their misdeeds,” the post continues.

The plan with the mass withdrawal on Monday is to see which exchanges honor the massive amounts of withdrawal requests. If the withdrawals are successful, then the exchange has seemingly not done anything shady. If not, and owners fail to withdraw their coins, maybe the exchange never actually had the Monero to sell in the first place. This sort of phantom money is what Monero community members have referred to as “paper Monero.”

Binance, one of the exchanges that community members pointed to, did not respond to a request for comment.

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

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

Some described buying Monero on an exchange just to withdraw it instantly. The 24-hour price of Monero is up .61 percent on Binance currently, and on Kraken the price of Monero has shot up more than 25 percent.

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