Privacy Coins Faced Coordinated Delistings
A simple narrative has existed in crypto for the past two years: Privacy coins are dead. Monero was delisted from Binance in 2024. Zcash lost over 95% of its ATH market cap. Dash went back into hiding. Regulators from the EU, Japan, South Korea, and Australia worked together with exchanges to prevent any cryptocurrency offering default privacy from transactions from being listed. However, launched just yesterday is Project Midnight, a privacy-centric blockchain built from the ground up as a partner chain to Cardano.
Its federated mainnet is already live with nodes run by Google Cloud, Blockdaemon, and Telegram's AlphaTON Capital. The NIGHT token is #60 by market cap with over $800 million market cap, after just reaching $1 billion daily trading volume. Three design choices are the reason why Midnight protocol is being noticed by regulated players while other attempts have been blacklisted.
In hindsight, the delisting of privacy coins by major exchanges between 2023 and 2025 was a coordinated affair. The FSA of Japan first began pushing exchanges to delist Monero, Zcash and Dash in 2018. Regulators in other countries did the same. Binance removing Monero in February 2024 was the decisive moment: if the details of every single transaction in a chain are opaque by default, it's not going to have on-ramps that real people use.
FATF's updated guidance on VASPs effectively made full-privacy coins non-compliant with the travel rule. This wasn't some theoretical regulatory bogeyman. This was a very real wave of delistings that took the liquidity of an entire class of crypto with it.
Selective Disclosure Changed the Compliance Equation
Binary thinking was a fatal mistake that many privacy projects made. Transactions are either completely private, or not at all. Monero's ring signatures obscured every transaction on its chain by default. Zcash had optional shielded pools, but to regulators the availability of fully opaque transfers was a compliance liability. Thing is, exchanges didn't want to sift through every Zcash transaction to figure out which ones were shielded and which ones weren't. They simply delisted the asset.
Midnight entered this adversarial climate with a new design that separated the privacy of data from regulatory opacity. That distinction is where the story gets specific.
Midnight crypto uses zero-knowledge proofs to allow one party to prove that something is true about some data (i.e. that they meet a KYC threshold, pass a sanctions screen, or have a valid credential) without having to show the data itself. That's called selective disclosure: the party with the information chooses what to reveal and the party asking for the information receives cryptographic proof that a compliance check was satisfied.
The difference between the privacy and Midnight isn't incremental. Monero literally couldn't say a single word to a regulator. Midnight can say to a regulator "this user passed identity verification" without revealing the user's name, address, or transaction history. Privacy is controlled at the application layer, not the base protocol layer, so developers building dApps on the midnight blockchain can create apps with the compliance logic already coded in.
This is a solution to the fundamental conundrum for regulated institutions. They need privacy of transactions to stay competitive (banks don't want competitors looking at their settlement transactions), but they need to be able to prove they're complying with anti-money laundering regulations. Midnight protocol gives them both.
And that's exactly why Monument Bank, a Bank of England-regulated financial institution with around £7 billion ($9 billion) in deposits and 100,000 retail and business customers, announced on March 25 that it would tokenize up to £250 million of retail customer deposits on Midnight. Would a completely opaque blockchain have cut it with Monument's compliance officers? Tough question, but the answer is probably not. The selective disclosure design did.
The midnight airdrop mechanism gave out NIGHT tokens to the Cardano community through the Glacier Drop and Scavenger Mine mechanics, which created a widely distributed holder base, but it was the regulatory solution that opened the floodgates for institutional capital.
Cardano Partnership Provided Political and Technical Leverage
Projects which launched as independent chains with privacy-focus had zero leverage against regulator crackdowns. If an exchange was threatened there was no other side of the ecosystem to present as a carrot for keeping the token listed. Midnight took a different approach and launched as a Cardano partner chain, coming to the table with technical and political capital built-in.
Midnight's Cardano Midnight airdrop model effectively "pegged" the NIGHT token supply to ADA holders from day 1, automatically aligning both communities behind a shared interest. The airdrop did more than that, however: it anchored the fate of Midnight to Cardano's wider ecosystem, with its own regulatory relationships and exchange listings.
Over 4.55 billion NIGHT were distributed to the community through the midnight airdrop Cardano, with tokens unlocking quarterly until December 2026. IOG founder Charles Hoskinson has been cultivating relationships with governments in Africa, the Middle East and North America for years. He announced the Midnight mainnet launch at Consensus Hong Kong in February, in tandem with Google Cloud and Telegram's AlphaTON Capital partnerships.
"I didn't come up to the stage and say, 'here's a new privacy coin.' I came up to the stage and said, 'here's enterprise privacy infrastructure.'" Messaging is important. Regulators instinctively opposed to a "privacy cryptocurrency" are less likely to take issue with a "data protection blockchain" when it's supported by Google Cloud, Pairpoint by Vodafone, and eToro.
The cardano midnight airdrop gave the midnight token grassroots distribution; the institutional partnerships gave it top-down legitimacy. Midnight occupied both lanes at once, something Monero and Zcash never even tried to do.
Institutional Adoption Validates the New Model
The strongest evidence that the Midnight protocol exploited a new market is found in its federated node operator list: Not one of those would be touching a Monero node. The Monument Bank deal alone speaks volumes. Phase one tokenizes £250 million worth of deposits. Phase two tokenizes investment products, including private equity and commodity funds. Phase three is Lombard-style lending on top of those assets.
Hoskinson called it one of the largest deals Midnight had ever done. The phases could ultimately lead to hundreds of millions to billions of total value locked. This three-phase roadmap from a Bank of England-regulated bank is not an experimental crypto partnership. It is a commercial deployment roadmap built on the assumption that the midnight blockchain can scale regulated financial products.
The NIGHT token's reaction in the market has been as follows. 24-hour trading volume went above $1 billion on March 25, propelling the Midnight token to the 10th position by 24-hour volume. Trading at $0.048, the midnight token is changing hands approximately 59% below its all-time high of $0.1185, so the market is not pricing in any certainty.
Skepticism is healthy. Open interest is currently at $41.7 million, and the 360-day token thawing schedule is a constant supply pressure extending through December 2026. These headwinds are very real. But the difference between Midnight's big-money adoption and that of every other privacy project to date is big enough to be worth noting.
The midnight crypto story being sold on NIGHT is not one of untraceable transactions, it's one of regulated data protection, and that reframing has attracted an entirely new class of partner.
Privacy Evolved or Perished
The point is, the relevant outcome of Midnight's odyssey wasn't that crypto privacy weathered the storm. The relevant outcome of Midnight's odyssey was that crypto privacy evolved or perished. And the only path to victory involved doing both at once.
Full-opacity privacy coins solved a problem regulators would not solve for: obfuscating transactions. The midnight airdrop Cardano model, in conjunction with a selective disclosure architecture, solved a different problem: Letting institutions and individuals safeguard privacy while also appeasing compliance. This is not the same product category, despite both including the word "privacy" in their whitepapers.
Is it built to last? Mōhalu will integrate Cardano Stake Pool Operators into Midnight's security in Q2 2026. This expands the net of decentralization beyond the current set of federated nodes. Cross-chain interoperability with Ethereum and Solana using ZSwap is a stated goal for Q3 2026 Hua phase. This could put Midnight in a position to function as a privacy layer for the broader Web3 ecosystem, rather than as a standalone chain.
If those timelines prove accurate, then we may start seeing Midnight privacy woven into multi-chain applications that also require confidential smart contract operations. Granted, a lot can still go sideways. The 360-day thawing period of the NIGHT distribution could apply consistent supply pressure all the way through Dec 2026, as tokens unlock in 4 quarterly installments. Any technical hiccups on mainnet launch could invalidate the institutional story. Privacy projects will no doubt continue to be heavily scrutinized by regulators despite offering selective disclosure.
But the data tells a clear story. Project midnight did not survive the privacy coin purge by being a better privacy coin. It did so by being something regulators had not seen before: a blockchain that designs compliance and privacy as complementary, not as an inherent trade-off.
With $800 million in market cap, billion-dollar volume days, and a Bank of England regulated institution tokenizing deposits on its network, the Midnight price is an early vote of confidence that this key difference can stand up to long term regulatory stress. Whether it can, will depend less on cryptography and more on whether selective disclosure actually satisfies the compliance regimes it was designed to appease.
