Europe’s going full Orwell 1984 on crypto privacy. European CEXs are flagging its users as “high-risk” for withdrawing ZEC to transparent addresses and shielding the coins afterwards. I am sharing this to raise awareness and push for decentralized alternatives like Zashi and its NEAR Intents Swap function.
These are the type of threatening emails you receive from European CEXs after buying, withdrawing and shielding ZEC:
In addition to that we have other draconic measures such as:
EU’s Travel Rule (Transfer of Funds Regulation), effective since December 30, 2024, requiring Crypto-Asset Service Providers (CASPs) to collect and share personal data about transaction originators and beneficiaries such as your name, distributed ledger address, account number, home address, official personal document number, date and place of birth, to “combat money laundering”
Our sovereignty and privacy are under attack. But we will not give up without a fight. I would like to express my sincere gratitude to each and every one of you who are working on technologies such as Zcash, Zashi, NEAR Intents and more, providing us with the tools to rebel against this.
EU is a giant with clay feet, they know it an that explains why they are racing towards becoming some kind of digital politburo.
They seem quite focused on 2027 onwards which should raise questions on what exactly will happen there in 2026.
Anyway if you live in EU, I would refrain from using any CEXs after the end of 2025 as the implementation of DAC8 will open the pandora box for a lifetime of harrassment.
How to they know a user shielded thier funds after withdrawal from an exchange? Are they tracking the transfer for a number of days/months after they have withdrawn?
This makes no sense and is impossible to enforce. For all they know it’s the same users Zashi wallet auto shielding for them.
If Zcash shielding is an issue then that exchange shouldn’t be supporting Zcash in the first place because EVERY SINGLE ZEC they have on their exchange has been in the shielded pool. They’re chasing paper tigers.
Good question, I asked myself the same thing. The fact is, I didn’t receive any such emails as long as I left my ZEC (purchased from this exchange) on transparent addresses. A couple of days after shielding, I received this email. As you mentioned, I also assume that the exchange tracks what happens to the coins after they have been withdrawn. When they see that the coins are disappearing from transparent into the Orchard Pool, their alarm bells start ringing.
I agree with you, from their POV it doesn’t make much sense to support ZEC only under the condition that the coins never touch the shielded pool. That is not enforceable.
Transparent addresses have disadvantages, but here we can see a big advantage. Temporary compliance and trojan horse for shielded addresses
If transparent ledgers had their ways (hint: they won’t), you would be looking in the future at transgenerational AML checks:
“Your BTCs are frozen until you tell us how your great great great grandfather acquired its 0.002 bitcoins and why he decided to spend 0.0004 BTCs on this on that day”
And no, the so called “encrypted” lightning network doesn’t fix this
I don’t want to publicly disclose where I bought/traded my Zcash.
I wanted to raise awareness of the strict and increasingly restrictive EU regulations. This is not about this particular exchange, but about all EU exchanges in general. I suspect that the exchange itself is not keen on this, but of course it is forced to comply with EU regulations. EU is the bad guy here, not the exchange.
Well if you have been a good customer, maybe their support would be willing to answer questions about how they knew what you did with your ZEC after you withdrew..
If they’re more-or-less aligned with Zcash values.. or some of them are, then this is a problem they might want to help us with.
