The U.S. Securities and Exchange Commission has invited Zcash founder Zooko Wilcox to participate in its December 15 roundtable on privacy and financial surveillance, marking a pivotal moment for privacy-focused cryptocurrencies.
The invitation follows a heated public exchange between Strategy founder Michael Saylor and Zcash scientist Eli Ben-Sasson over whether Bitcoin should adopt privacy features similar to Zcash's encryption technology.
The SEC's Crypto Task Force will host the roundtable at its headquarters with proceedings webcast to the public.
Institutional interest in privacy coins has surged. Grayscale filed an S-3 registration statement on November 26 seeking to convert its Zcash Trust into the first U.S. spot exchange-traded fund for a privacy coin.
What Happened
On December 5, Ben-Sasson revealed details of his conversation with Saylor that reignited market interest in the privacy cryptocurrency. Saylor argued that Bitcoin should not incorporate Zcash-style privacy features because doing so would enable nation-states to shut down the flagship cryptocurrency.
Ben-Sasson countered that privacy and compliance can coexist. "There's a way to have the cake and eat it too," he said, proposing that viewing keys could allow selective disclosure alongside transaction shielding.
The debate reflects a broader philosophical divide. Privacy advocates argue that financial confidentiality is essential for user autonomy and institutional adoption.
Zcash regained footing above $375 following the December 5 exchange. The cryptocurrency is currently trading near $340, down 10% in 24 hours.
The privacy coin had briefly surged toward $700 in November. Bitwise CEO Hunter Horsley sparked heated debate that month by suggesting the "Bitcoin only" crowd would struggle to explain why Zcash shouldn't be considered legitimate cryptocurrency.
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Nasdaq-listed Reliance Global Group converted its entire digital treasury into Zcash on November 25. The insurance technology firm cited the cryptocurrency's Bitcoin-based architecture enhanced with optional privacy as aligning with institutional compliance needs.
Why It Matters
The SEC roundtable represents the first major regulatory dialogue on privacy-preserving cryptocurrencies since institutional adoption accelerated. Grayscale's proposed ETF would be the first regulated investment vehicle for a privacy coin in the United States.
The Zcash Trust currently holds approximately 2.4% of all ZEC in circulation as of September 30. If approved, the fund would trade on NYSE Arca under ticker ZCSH with a 2.5% management fee.
Privacy development is accelerating industry-wide. Paxos Labs and Aleo announced a partnership in October to create USAD, the first privacy-preserving U.S. dollar stablecoin.
The Ethereum Foundation launched a dedicated Privacy Cluster in October with 47 researchers, engineers and cryptographers. The team is developing protocol-level privacy features including private payments and decentralized identity solutions.
VanEck CEO Jan van Eck has flagged Zcash as an alternative to Bitcoin, citing growing concerns over Bitcoin's long-term cryptographic security and privacy limitations. Approximately 30% of Zcash transactions now involve shielded pools that encrypt transaction details.
The December 15 roundtable could shape how regulators treat privacy-preserving technologies. Participants will debate whether financial privacy can coexist with anti-money laundering requirements and regulatory transparency.
Privacy advocate Naomi Brockwell stated last month that authoritarians thrive when people lack privacy. "When those in charge start being hostile to privacy protections, it is a major red flag," she said.
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