Zcash Under Siege: Arthur Hayes Warns of Volatility and Privacy Erosion in 2025
Privacy coin Zcash faces a perfect storm as market turbulence and regulatory scrutiny collide. BitMEX founder Arthur Hayes fires a warning shot—just as institutional players start eyeing crypto's 'dirty laundry.'
Volatility meets vulnerability
ZEC's price swings turn violent amid broader market instability. The privacy-focused asset—once hailed as Bitcoin's stealthier cousin—now battles existential threats on two fronts.
Privacy protocols under microscope
Global regulators increasingly view anonymity features as loopholes rather than innovations. Hayes suggests Zcash's cryptographic shield might not withstand coordinated attacks from both markets and governments.
Meanwhile, Wall Street's crypto embrace looks increasingly selective—privacy coins need not apply. Another reminder that decentralization theater only goes so far when the financial establishment comes knocking.
TLDR
- Arthur Hayes warns Zcash holders to withdraw their tokens from centralized exchanges to protect privacy.
- Zcash experienced significant price volatility, surging to $723 before dropping to $450 within a few days.
- Most centralized exchanges only support transparent addresses, undermining Zcash’s privacy features.
- Zcash’s unique privacy model uses shielded addresses to conceal transaction details through zero-knowledge proofs.
- Regulatory pressure and concerns over compliance may lead exchanges to delist privacy coins like Zcash.
Arthur Hayes, co-founder of BitMEX, recently issued a warning to Zcash (ZEC) holders. He cautioned that keeping Zcash on centralized exchanges (CEXs) could compromise the privacy features the coin is designed to protect.
Hayes expressed concern that users would lose their anonymity if Zcash remained on these platforms. His comments came as the ZEC price faced volatility, dipping after reaching highs earlier in the week.
Zcash Price Fluctuates Amid Market Concerns
Zcash saw extreme price movements this week. The coin surged to $723 on Saturday but quickly fell to $504 by Sunday. Despite a brief recovery to $677 on Monday, the price again plunged to $450 by Wednesday. At this level, the coin had dropped 37% from its weekend peak. However, it remained up 5% over the past seven days, with a market cap around $7.4 billion.
The token’s surge from about $40 to over $700 in just two months raised concerns among analysts. They pointed to the relative strength index (RSI), which reached overbought levels. This rapid rally has led some to question whether Zcash’s price had overheated.
Arthur Hayes’ warning emphasized the Core issue with Zcash on CEXs: its privacy features are compromised. Zcash uses shielded addresses to protect transaction details, which are hidden using zero-knowledge proofs (zk-SNARKs). These shielded addresses ensure that sender, receiver, and transaction amounts remain private. However, most centralized exchanges only support transparent addresses, making transactions visible on the blockchain.
By storing Zcash on a CEX, users risk exposing their transaction history. This fundamentally undermines the coin’s privacy guarantees. Hayes noted that the coin’s design aims to protect user anonymity, but this is lost when using centralized platforms.
Zcash is built on the idea that users control their privacy. The use of shielded addresses distinguishes it from other cryptocurrencies, including Bitcoin. However, exchanges that fail to support shielded transactions turn Zcash into a pseudonymous asset rather than a truly private one.
Zcash faces growing regulatory scrutiny globally. In Europe, the introduction of frameworks like MiCA has increased pressure on exchanges to comply with privacy standards. This has led to speculation that exchanges could delist privacy coins, including Zcash, to meet regulatory requirements.
Centralized exchanges are already under pressure to comply with global regulations. These regulations often focus on preventing money laundering and other illicit activities. As privacy coins like Zcash are seen as potentially enabling such activities, exchanges may face challenges in supporting them.
Arthur Hayes’ warning about privacy also highlights broader concerns over self-custody. Centralized exchanges control users’ private keys, leaving coins vulnerable to issues such as withdrawal freezes or delisting. This custodial risk was exposed during the FTX collapse, where users lost access to their funds.
Zcash’s Privacy Design Under Scrutiny
Zcash’s unique privacy model allows users to choose between transparent addresses and shielded addresses. While transparent addresses behave like typical Bitcoin addresses, shielded addresses protect users’ transaction data. This privacy-focused design is the foundation of Zcash’s appeal.
However, despite the privacy features, many users continue to store Zcash on centralized exchanges. By doing so, they compromise the very privacy that makes the coin appealing. Hayes warned that holding ZEC on a CEX defeats the purpose of using Zcash in the first place.
If you hold $ZEC on a CEX, withdraw it to a self-custodial wallet and shield it.
— Arthur Hayes (@CryptoHayes) November 12, 2025
As privacy coins face more regulatory challenges, Zcash’s dual address system might be under more scrutiny. The tension between privacy protection and regulatory compliance is unlikely to ease. The challenges for Zcash holders will likely grow, especially if exchanges face pressure to delist the coin.
Recent discussions about Zcash’s origins have also emerged. Speculation linked Zcash developer Daira-Emma Hopwood to Bitcoin’s creator, Satoshi Nakamoto. These rumors resurfaced after an interview with Hopwood gained attention online.
While no concrete evidence has been presented to support these claims, the connection has sparked interest. Zcash’s relationship to Bitcoin’s early cryptographic research has been a topic of debate among crypto enthusiasts.
Despite the speculation, the link between Hopwood and Nakamoto remains unproven. Nevertheless, the renewed debate adds another LAYER of intrigue to Zcash’s recent price rally.
