Government pressure on privacy tokens continues to increase. This sticks to them as a label that constantly creates problems especially for them. Therefore, the Grayscale-backed altcoin project plans to remove privacy features from Blockchain. Accordingly, the project has announced plans to deprecate its main Blockchain sandboxes.
Horizen is trying to get rid of the Privacy Coin tag!
Grayscale-backed Horizen devalues protected pools on the main Blockchain. The altcoin project says it is now just a layer-0 blockchain from now on. The decision comes after regulators put pressure on privacy coins. Crypto exchange Huobi delisted several privacy coins in September to comply with regulations in various jurisdictions. Also, as you follow on Kriptokoin.com, the European Banking Authority published draft guidance in March highlighting the money laundering risk associated with tokens. Following these developments, Horizen announced its final decision on Twitter as follows:
The deprecation of Horizen main Blockchain protected repositories means that privacy features will be removed from the Horizen main Blockchain at a consensus level. This means that ZEN will no longer be a privacy coin after this change.
The deprecation of #Horizen mainchain shielded pools means privacy features will be removed from the Horizen main blockchain at the consensus level. This means $ZEN will no longer be a privacy coin after this change. Learn more about this upcoming change: https://t.co/HSno4RJaqO pic.twitter.com/GbMMrX9T48
— Horizen (@horizenglobal) June 27, 2023
Thus, once the deprecation is complete, the protocol’s native token ZEN will no longer be a privacy coin. So it will fall into a different category from Monero (XMR), Dash and ZCash, among others.
Given the regulatory environment in the industry as of today, tokens labeled as securities and using privacy features are mostly targeted by regulators such as the United States Securities and Exchange Commission (SEC). A renunciation of secrecy could potentially save Horizen from many enforcement actions in the near term. According to Horizen, the changes will go live on the test-net in August. Afterwards, main-net will save the changes in September of this year.
Potential impact of development on altcoin price
It remains unclear how the proposed changes will affect ZEN price in the long run. However, the news dropped the altcoin price by 6.63% on a daily basis. That’s why the altcoin has given back all of its gains for the week. At press time, ZEN was trading at $6.76.
Horizen is a zero-knowledge blockchain network powered by the largest node infrastructure in the industry. The interoperability of blockchains is provided by the Zendoo protocol, which uses SNARK authentication and provides full flexibility in side-chain type, consensus, speed and privacy. Cryptographic verification of networked Blockchains provides enormous scale. Also, the network currently supports up to 10,000 side-chains with a throughput cap of 10,000,000 TPS.
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