Earlier today we reported on yesterday's big news story, an announcement from Coinbase UK that they would be dropping the very popular ZCash cryptocurrency. To recap:
“Privacy coins take the blockchain concept and use extra measures to hide personal user data, data that could otherwise be used to track a users identity through a little investigation. Because of this, and because privacy coins can protect criminal data, many governments and indeed, exchanges are starting to shy away from them, it seems Coinbase are no exception to this. According to Cointelegraph, this drop is only going to affect UK customers, suggesting that this may have come about as a result of recent comments made by the Financial Conduct Authority in the UK.”
Now we want to discuss what this might mean for other cryptocurrencies like Dash and Monero on a far wider scale. Of course, changes like this in the UK could well reflect across other exchanges over the world, especially given that Coinbase are an international company. Of course, Coinbase have not said that US customers will lose access to ZCash, however in the future this could well be the case. The fact of the matter is that regulators do not like privacy coins and therefore, exchanges are becoming aware that their lives could be made very difficult in the future if they facilitate the trade of them. Rule makers like to phase things out by coming down heavy on those that choose to do something they dislike, Coinbase seem to be predicting that this could happen to them, so are looking to get out early.
We should also consider the implications this has for ZCash in the UK. Coinbase have set a deadline, after which all ZCash holdings will be converted back into GBP. This change is set to see a huge ZCash sell off, with the majority of ZCash users wanting to sell off their share of ZCash before the price starts to plummet. Have Coinbase triggered a huge back pedal for ZCash as a cryptocurrency, possibly so. This is going to crush investors confidence and continues to help relay bad messages about privacy tokens across the cryptocurrency community.
Of course, the price of ZCash might not see any significant movements as a result of this, but one thing is certain, we can never be sure of what might happen. Our advice is to keep an eye on the value of ZCash and use your knowledge to invest carefully. If you have ZCash in a Coinbase wallet, move it over to a different one (ideally a cold, offline wallet) and just make sure you’re super careful with what you do next.