A large portion of Zcash-related exchange activity in the United States occurs on exchanges that are registered with FinCEN as money service businesses (MSBs).
On May 14, 2018, the New York Department of Financial Services (NYDFS) issued a press release explaining their decision to grant Gemini custodial and listing services for Zcash.
Of note, the NYDFS states that, “Virtual currency license applicants are subject to a rigorous review of anti-money laundering, capitalization, consumer protection and cyber security standards.”
If a user opts to shield her funds, they are no longer visible on the blockchain. Once shielded, funds can be transferred using shielded transactions, which preserves the privacy of both the Sender and the Recipient. This facilitates compliance with regulations that mandate privacy for personal financial information, such as the Gramm-Leach-Bliley Act in the US, and the General Data Protection Regulation in the EU. An encrypted memo field allows the Sender to attach information to a shielded transaction, facilitating compliance with the Bank Secrecy Act’s “Travel” rule.
Support for Payment Disclosure and viewing keys support transaction analysis products and services, allowing MSBs to automatically record the source and counterparty details for all shielded transactions, while ensuring that their customers’ personal financial information is protected.