It has yet to be disclosed as to why, but the UK arm of Coinbase is dropping support for Zcash (ZEC) cryptocurrency.
The move has, understandably, rattled Zcash investors.
Coinbase Drops Support for Zcash
According to customers of Coinbase UK, the exchange is sending out letters telling traders to convert their ZEC holdings by August 26. Alternatively, traders are encouraged to export their coins to an external wallet. If they fail to do so, their ZEC balance will automatically convert to British pound sterling in their user accounts.
As stated, the crypto platform gave no reason for dropping the coin, but as a privacy-focused cryptocurrency, Zcash could be a preferable choice for criminals. This is simply one of many theories already posed by head-scratching traders.
The coin’s developer, The Electric Coin Company, confirmed the news on Friday. It said the following in a tweet:
“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 percent compatible with UK regulations & KYC/AML requirements.”
Zcash allows users to hide their transaction details using a type of zero-knowledge proof called zk-SNARKs. The option to do so has risen concerns in some instances. For example, when Coinbase Pro announced support for the asset in November 2018, it said it would only support withdrawals to transparent addresses.
The move indicated that users could deposit from shielded addresses but could only withdraw coins to a transparent address.
At the same time, the British tax agency, HM Revenue & Customs, has been pushing major cryptocurrency exchanges—including Coinbase, eToro, and to reveal customer names and transaction histories in order to source unpaid taxes.
While UK users are obviously affected, no other jurisdiction appears affected by the removal of Zcash support.
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