The UK division of US-based cryptocurrency exchange Coinbase has sent letters to customers telling them to convert their ZCash coins or remove their balances by August 26th, Coindesk reports.
Balances not relocated will be converted to British pounds.
ZCash is a so-called “privacy coin” that allows users to “shield” (obscure) transaction details using a type of cryptography called zk-SNARKs.
Proponents say privacy coins allow cryptos to behave more like real-world cash, which can be transacted in private. Cash-like features have serious implications online (global subversion, transnational crime), however, and this feature may have led to the coin running afoul of regulators.
In July, the UK’s Financial Conduct Authority published “Guidance on Cryptoassets” which established that trading of “exchange tokens” like bitcoins and ether must abide by anti-money laundering rules.
Regulators wrote that they were concerned about “market integrity harms” implied by opacity in crypto networks:
“A combination of market immaturity, volatility, and a lack of credible information or oversight raises concerns about market integrity, manipulation and insider dealing within cryptoasset markets. This may prevent the market from functioning effectively and damage its reputation.”
Last week, a report emerged that a small pool of 300 crypto “whales” control 80% of the global supply of tethers, a so-called “stable coin” cryptocurrency pegged to the US dollar. Over $4 billion USD in tethers have been issued, and they are widely used for exchange arbitrage, and, allegedly, for market manipulation.
Electric Coin Company, developers of ZCash, tweeted to reassure customers that the delisting affects Coinbase UK only, stating that other UK exchanges are still hosting the coin:
Those affected by @coinbase UK issues: this is limited to Coinbase UK only. UK residents can still buy/sell Zcash through @cex_io. No other exchanges in the UK affected. To pre-empt speculation, we confirm that Zcash is 100% compatible with UK regulations & KYC/AML requirements.
— Electric Coin Company (@ElectricCoinCo) August 9, 2019