Zcash is fully compatible with global AML/CFT standards, including the FATF Recommendations, the European Union’s Fifth Money-Laundering Directive, and the United States’ Anti-Money Laundering regulations.
Importantly, the privacy provided by Zcash does not prevent regulated entities from fulfilling their regulatory obligations, including customer due diligence, transaction monitoring, record-keeping, and reporting suspicious transactions. Zcash was designed to facilitate compliance with the FATF “Travel Rule”, with an encrypted memo field that allows required originator and beneficiary information to be attached to virtual asset transfers between VASPs.
A large percentage of Zcash trading occurs in the United States, on exchanges that are registered with FinCEN as money service businesses (MSBs), including Kraken, Poloniex, Coinbase, and Gemini. In May 2018, the New York Department of Financial Services (NYDFS) issued a press release explaining their decision to grant Gemini permission to provide custodial and listing services for Zcash. Of note, the NYDFS stated that, “Virtual currency license applicants are subject to a rigorous review of anti-money laundering, capitalization, consumer protection and cyber security standards.”
The Electric Coin Company engages proactively, constructively, and cooperatively with policy-makers and regulators. We aim to provide accurate and objective information to help inform and support a risk-based approach to regulation. We welcome the opportunity to discuss regulatory or compliance concerns, and answer questions relating to how the Zcash works and its implications for AML/CFT compliance.
For more information , click here to read the full Zcash Regulatory & Compliance Brief.