Despite some success with users, privacy coins still continue to worry regulators. These have indeed put in place devices that force exchanges to remove them from their platform. This is particularly the case with ShapeShift which had to take this action regarding the Zcash in order to meet regulatory requirements. Usually known for her rebellious demeanor, the exchange shows in this way that she has become a little more respectful of established laws. Explanations.
DASH and Monero also affected by the measure
Legal manager of the exchange, Veronica mcgregor justified the decision taken by management regarding Privacy coins. In addition to Zcash, Monero and DASH are also temporarily banned from the platform for the same reasons. “We have withdrawn the Privacy coins due to their regulatory concerns. At least for now, we are not working with these pieces, ”she said. Significantly, the withdrawal of ZEC surprised more than one given the proximity between the asset and the platform. The latter had indeed invested in the Electric Coin Company (ECC) who participated in the launch of Zcash.
More than a desire to be in accordance with the texts, it is also about ShapeShift a perfect opportunity to improve your image. The exchange had already been indexed in the past by a Wall Street Journal report stating that it promotes money laundering. This was a violation of the guidelines of the American Financial Crimes Enforcement Network (FinCEN). These required exchanges to prevent the proceeds of crime from passing through their institution. ShapeShift also distinguished herself for allowing users of trade cryptocurrencies without verification of identity.
Privacy coins undergo more in-depth controls by the authorities
Unlike other assets, Privacy coins cannot be content with a simple collaboration with analysis companies like Chainalysis to prove their good faith. This is what especially thinks Peter Van Valkenburgh who is a member of the board of directors of the Zcash Foundation. The latter deplores the fact that these projects do subject to further investigation or background checks by authorities. A zeal which, according to him, harms the development of Privacy corners.
“To my knowledge, FinCEN has made it clear to regulated companies that there is a way to comply with the regulations, just as banks process cash. The law on banking secrecy is extremely broad. It gives prosecutors and regulators many powers. This vagueness on our financial supervision laws is problematic for me “Complained, Mr. Van Valkenburgh.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.
This feeling of injustice should not, however, disappear as long as the authorities in charge of this control demand more transparency in transactions involving privacy coins. It would not be surprising to see other exchanges also exclude these assets from their platforms in the future.