The U.K. arm of Coinbase appears to be dropping support for the privacy-focused cryptocurrency zcash.

According to customers, Coinbase UK is sending letters out warning people that they will need to convert their zcash (ZEC) holdings, or remove them to an external wallet, by Aug. 26.

Guild of Guardians Built to 'Win' the Web2 Mobile Space: Game Director

13:18

Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO

05:10

Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny

04:07

The first video of the year 2024

40:07

The last regression video of the year 3.67.0

@zcash @ElectricCoinCo @coinbase what's going on with Zcash in the UK? pic.twitter.com/6GWS9CuIoH

— Alex (@deskofwilkes) August 8, 2019

The cryptocurrency exchange gave no specific reason for the removal of the cryptocurrency, but said all remaining ZEC balances on Aug. 26 will be automatically converted to British pounds in users accounts.

The Electric Coin Company, developer of zcash, appeared to confirm the news, saying in a tweet on Friday:

"Those affected by @coinbase UK issues: this is limited to Coinbase UK only. UK residents can still buy/sell Zcash through @cex_io. No other exchanges in the UK affected."

It further said "To pre-empt speculation, we confirm that Zcash is 100 percent compatible with UK regulations & KYC/AML requirements."

In its guidance released at the end of July, the U.K.'s financial watchdog, the Financial Conduct Authority, said that while some forms of crypto assets may fall under its regulatory remit, "exchange tokens" such as bitcoin and ether do not. That category would appear to include zcash.

The British tax agency, HM Revenue & Customs, has recently been sending out letters demanding that cryptocurrency exchanges – including Coinbase, eToro and CEX.IO – reveal customers’ names and transaction histories in a bid to claw back unpaid taxes, industry sources told CoinDesk.

Zcash allows users the option to hide (or shield) details of their transactions using a type of zero-knowledge proof called zk-SNARKs.

When Coinbase Pro announced zcash support back in November 2018, it said that it would "support deposits from both transparent and shielded addresses, but only support withdrawals to transparent addresses. In the future, we’ll explore support for withdrawals to shielded addresses in locations where it complies with local laws.”

STORY CONTINUES BELOW

Recommended for you:

Users of Coinbase in other jurisdictions appear unaffected by the removal of zcash support at press time.

Zooko Wilcox image via CoinDesk archives

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.