- Horizen has dropped shielded transactions from its protocol, stripping its privacy coin status
- ZEN is one of five privacy coins that will this week be delisted from Binance in four countries
- The Horizen community voted to remove anonymity in a bid to ensure the survival of the project
Ethereum sidechain Horizen will strip out its privacy features after a community vote following Binance’s delisting of the coin in four countries. Horizon’s ZEN token was one of five which fell foul of Binance’s coin review targeting privacy coins last month, which means that the coin is now no longer available to trade in France, Spain, Poland and Italy. In consequence, the Horizen community has voted to “removal of shielded transactions with transparent inputs” from the blockchain’s design, essentially ensuring it is no longer a privacy coin in the hopes that it won’t meet further regulatory issues.
ZEN Facing Binance Delisting
Horizon has been around since 2017, although it has hardly pulled up any trees in the crypto space in the six years it has been around. The Ethereum sidechain calls itself a “zero-knowledge enabled cross-chain protocol allowing auditable and privacy-preserving blockchains,” but this latter claim is not seemingly moot following the community vote.
ZEN was among an initial 12 privacy coins Binance said last month it was going to ditch in the four countries following regulatory pressure, although a recent review brought this number down to five. However, ZEN is still among these coins, meaning it won’t be tradeable in the four countries from this week.
Proposal Gets the Green Light
A proposal, ZenIP 42204, was in fact put forward to the community back in January to resolve potential technical and regulatory issues with the protocol’s design:
Technical debt, combined with the fact that shielded transactions make up a very small percentage of transactions … and not to mention the current regulatory environment, begs the question: “Should Horizen continue to be a privacy coin, and if so, does it need to be natively supported on the mainchain?” Is the regulatory risk worth the utility of shielded transactions?
The answer, the community decided this week, was ‘no’ as it voted to strip shielded transactions, essentially meaning that ZEN will no longer be a privacy coin after the change is implemented. The move didn’t go down that well with some supporters:
A blockchain caving to regulatory pressures is quite ironic
— Jared (@TheDivineStein) June 28, 2023
It remains to be seen whether the move, which ideally would have taken place before Binance’s delisting, will have an impact on the exchange’s treatment of ZEN or if it is too little too late.
