How the privacy works
Three mechanisms operating together, and each hides a different part.
Ring signatures
hide the sender. A transaction is signed by a group of possible signers, and an observer cannot tell which member of that group actually spent the funds.
Stealth addresses
hide the recipient. The sender generates a one-time address for each payment, derived from the recipient’s public keys, so nothing on the chain links back to a published address.
RingCT
hides the amount, using cryptographic commitments that prove the sums balance without revealing what they are.
The combination is on by default with no optional mode. That design choice is deliberate: a privacy feature that most people leave off provides weak privacy for the few who use it, because using it becomes the signal.
Why exchanges removed it
The same property that makes Monero useful makes it difficult for regulated intermediaries. An exchange running transaction screening cannot trace the origin of incoming XMR, because the chain does not record it.
Binance delisted XMR in February 2024. Kraken removed it for users in the European Economic Area. Several other large exchanges did the same under pressure from AML requirements and, in Europe, from MiCA.
The coin itself continued working exactly as before. What narrowed was the path between XMR and ordinary money.
What this means for a merchant
Two consequences that pull in different directions, and both are real.
Demand exists and is specific
Customers who choose Monero usually do so deliberately, and they cluster in identifiable places: VPN and proxy services, privacy tooling, hosting providers, and businesses whose customers value discretion. For those merchants, refusing XMR turns away paying customers who have no substitute in mind.
The off-ramp is narrower
Converting XMR to fiat requires a route that supports it, and that list is shorter than it was. Before enabling the coin, confirm with your provider what happens after the payment arrives, because that question decides whether accepting it is practical.
A gateway that converts on receipt handles this internally, which is generally the arrangement that makes XMR workable for a business.
How Monero differs from mixing services
Worth separating, because the two get grouped together and behave differently.
A mixing service sits on top of a transparent chain and pools funds from many users to break the link between sender and recipient. It is an intermediary, it can be shut down, and using one is itself a signal that screening tools flag.
Monero builds privacy into the protocol, so there is no service to shut down and no separate step that marks a transaction as unusual. Every transaction on the network looks the same as every other, which is precisely what makes the privacy meaningful.
The regulatory response to each has been different for the same reason: a mixer can be sanctioned as an entity, a protocol cannot.