ShapeShift has revived its support for private transactions in Zcash, indicating a return to its privacy-oriented cryptocurrency services after becoming a decentralized exchange (DEX) aggregator.

In a statement released on Thursday, ShapeShift confirmed that its self-custodial DEX and wallet now accommodate shielded transactions for Zcash (ZEC). This development coincides with Zcash Community Grants contributing $50,000 to fortify ShapeShift’s technological and marketing strategies.

The organization’s objective is to “offer true privacy on-chain for its users.”

Previously, ShapeShift had removed anonymity coins from its platform in 2020 under regulatory pressure when it functioned as a centralized exchange, prior to evolving into a DEX aggregator.

“Integrating shielded ZEC into ShapeShift DAO expands access to unstoppable private money,” stated the Zcash community grants team. “It provides the ShapeShift community a decentralized way to access and utilize ZEC without dependence on centralized exchanges, which aligns perfectly with the values of privacy, freedom, and self-custody that Zcash was established on.”

The Infrastructure

A representative from ShapeShift’s DEX reported in Zcash’s forums that “ShapeShift today is a DAO, not the centralized company that it was back in 2016.”

“Regulatory pressure had caused ZEC’s previous delisting, but that was under an entirely different organizational structure. Today, ShapeShift DAO is community-governed and fully transparent.”

ShapeShift is leveraging a node network facilitated by blockchain infrastructure company Liquify. Their DEX now features a refined user interface akin to Uniswap for enhanced mobile optimization.

Crypto Privacy Faces Increasing Scrutiny

According to Arthur Firstov from Mercuryo, “privacy is the foundation of trust.” Zcash utilizes zero-knowledge proofs (ZK-proofs) to ensure private transactions where the amounts and participants are not publicly disclosed.

Since Zcash’s introduction in late 2016, ZK-proofs have become a critical area of advancement. Firstov noted that these proofs allow users to validate truths without disclosing personal information.

However, financial privacy applications often attract scrutiny from regulators. Recent reports suggest that the European Union is poised to implement regulations prohibiting the usage of privacy-preserving tokens and anonymous accounts by 2027, as they continue to crack down on potential financial misuse.

In line with this, Ki Young Ju, CEO of CryptoQuant, observes that the trend may prompt a growing demand for censorship-resistant “dark stablecoins” as oversight intensifies.