Zcash Censorship

Are their any War-game scenario plans for a widespread censorship campaign that would likely lead to Zcash being delisted from centralized exchanges? Today, Senator Warren released a proposed bill and included troubling language towards privacy coins. As follows from the proposed bill: “(d) TREASURY REGULATIONS.—Not later than 120
24 days after the date of enactment of this Act, the Secretary
4
SIL22D55 70R S.L.C.
1 of the Treasury shall promulgate a rule that prohibits fi2 nancial institutions from—
3 (1) handling, using, or transacting business
4 with digital asset mixers, privacy coins, and other
5 anonymity-enhancing technologies, as specified by
6 the Secretary; and
7 (2) handling, using, or transacting business
8 with digital assets that have been anonymized by the
9 technologies described in paragraph (1).”

Link to this bill: https://www.warren.senate.gov/imo/media/doc/DAAML%20Act%20of%202022.pdf

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Hello Joker and welcome to the Zcash Forum!

These concerns are widely shared among the Zcash community, see also this thread where we suggested some possible solution.

Still there is no official communication/plan from ECC or ZF that I am aware of, and I think it’s time for putting down a war-game scenario like you suggest.

The ban of privacy coins from EU and US is a milestone in the ECC roadmap that has not been considered.


I am sure ECC and ZF will fight when it will happen but having a plan is always better.

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history teach us that Cryptography & Privacy win
the more they push against it, the harder it pushes back

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I like how ECC foreshadowed this issue. I propose an idea on a UX and UI development tip, that I believe will strengthen the air-tightness of the censorship and helps deliver liquidity.

  1. An In-house ECC developed Zcash P2P Exchange: Peer-to-peer (P2P) exchanges allow buyers and sellers to connect directly, without the need for a central authority/clearing house to facilitate these transactions. This means that even if a particular P2P exchange platform is censored, users can still trade directly with one another. In the world class UX & UI that ECC is developing, I believe P2P trading is a great step in helping those buying and selling outside of exchanges.

I’d love to understand if this is possible, if not, what are the major things holding this back? My background is Data Science, with very little cryptography knowledge. Any ECC engineers willing to input?

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Zcash absolutely needs a contingency plan in the (likely) case of a crackdown by authorities.

That is why I made this thread about why the ECC not prioritizing node count is a bad and naive idea.

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I used the ZEC shielded pool and over the past 4 months I have had two centralized exchanges asking me for financially sensitive information from my footprint in the legacy system as a result. On one exchange, I completed full AML/KYC in 2016. On the other, I completed full AML/KYC in 2019.

I feel intimidated and threatened. Is anyone else having a similar experience?

SD

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Are they asking about your ZEC history? Are you willing to disclose which exchanges?

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We are engaged on a number of fronts in the EU and US. While our regulatory and policy engagement is important and impactful, having options to acquire and transact without being forced to use centralized intermediaries is a good objective and should be prioritized by the ZEC community imho.

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Josh, nice hearing from you. Here is what I’m getting:

  1. What is your occupation/employment?
  2. What is the [Source of Funds] for Zcash deposits into your account?
  3. We noticed a large number of deposits conducted in your account in this quarter. Could you please provide details as to the reason for the frequency and values of these transactions?
    AND**************************************
    We are reviewing your account to keep up with regulatory requirements. Can you please attach the last three months of bank statements directly to this email? We require these in order to maintain know your client (KYC) standards. Thank you for your cooperaiton! [sic]

this is coming from a well known CEX. I’m not sure if there is action you could take or advice you could give me.

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I would disclose this exchange if it would be helpful…maybe in DM?

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Hi Josh and thank you for taking your time to participate in this discussion. I guess that when you talk about

options to acquire and transact without being forced to use centralized intermediaries

you are referring respectively to on/off fiat ramp and decentralized exchanges such as thorswap.finance? I know the latter is already funded by a grant, not sure about the former.

If this is the case, I strongly agree both should be prioritized.

PS: imagine having some service like Moonpay integrated into ZecWallet Lite and Nighthawk :heart_eyes:.

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Yes integration in wallets to buy Zcash wud be great if possible. Integratin moonpay wud make apple pay / google pay also possible, big step for wide adoption iwo.

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Moonpay doesn’t support zcash. Besides, they require KYC too.

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Hi hanh, do you actually know any on/off ramp who doesn’t require KYC? AFAIK I don’t think it is possible to buy crypto without KYC in general, but if you know any way I would be glad to know.

Moonpay doesn’t support Zcash probably because no one talked to them yet, my intention would be to facilitate a grant to integrate one of this ramp service into Zcash mobile wallets.

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So invasive! I’ve seen this level of questioning from one exchange but to my knowledge it wasn’t specific to ZEC.

I’ve seen less invasive requests for source of funds from other exchanges when ZEC was involved based on their assessment of risk.

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Seems like MoonPay removed ZEC support sometime in the later half this year. @NighthawkWallet had partnered with MoonPay and supported buying/selling ZEC via them.

Good news is that there are newer (non-US based) exchanges that want to integrate with Nighthawk and we’ll be looking forward to making it happen.

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I’d be very surprised if you find any on/off ramp that doesn’t have KYC. US regulations are very strict in this area.

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I missed the whole Moonpay story, my bad should have done some search.
Great to hear about the new non US exchange !

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