I’ve been thinking that one of the concerns about the zcash shielded pool(s) from a regulatory standpoint must be this: how do you know whether or not someone is lying if they say they have no assets stored in a shielded pool?
I searched the forum but didn’t see any topics that looked like they covered this question, apologies if I missed a relevant thread.
Holding up the threat of legal action if its found out otherwise through some type of search method is the only real way (not unlike the GPC (I think that was the acronym) we heard about today)
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The short answer is that it’s completely up to the user whom they choose to disclose thier shielded holdings to.
Zcash provides safe ways for users to disclose thier holdings by using Viewing Keys (for all of a shielded addresses transactions) or Payment Disclosure (for a single transaction).
But really, Zcash very similar cash. Just like you can’t “know” if a person you met is lying about being broke but actually has million dollars in cash buried in thier back yard if they don’t choose to tell you about it.
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Ask that same question for bitcoin. If someone says that they have no bitcoin, how would you know whether that is true?
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If you purchase the ZEC on an exchange that conducts proper KYC, and then transfer funds to a shielded pool, law enforcement or an auditor may legally compel you to show via a viewing key or some other means that you are still in custody, or where or to whom you moved the money.
Good point! If someone pays me in BTC then there is a chance that they could leak or be required to disclose my address to regulators along with other personal data.