That’s the third privacy coin delisted by ShapeShift in a week. First $XMR and $DASH as announced last week and now $ZEC (also delisted last week, but only announced this week because reasons).
Some choice quotes:
“We’ve taken down the privacy coins because of their regulatory concerns,” Veronica McGregor, ShapeShift’s chief legal officer, told CoinDesk in an interview. “At least for the moment, we’re not working with those coins."
And:
Peter Van Valkenburgh is director of research at Coin Center and a member of the Zcash Foundation board. He explained to CoinDesk in a phone call that guidance from the U.S. Financial Crimes Enforcement Network, or FinCEN, “basically says, you have to make sure you are taking reasonable steps from a cost-benefit analysis to stop the proceeds from crime from flowing through your institution.”
Because many cryptocurrencies, such as bitcoin (BTC, -0.41%), make all transactions and balances public, he explained, working with blockchain surveillance firms like Chainalysis or Elliptic can be enough to be seen as taking reasonable steps.
That said, privacy-preserving cryptocurrencies will be treated, Van Valkenburgh said, like someone who shows up at a bank with a large bag of cash. They may be subject to greater scrutiny or more thorough background checks (as possible examples).
“To my knowledge, FinCEN has fairly clearly articulated to regulated crypto companies that there is a way to comply, just as banks deal with cash,” Van Valkenburgh said.
Emphasis added. These exchanges can be compliant while listing privacy coins – see Gemini – or they can be spineless cowards like ShapeShift.