By 2025, Monero and Zcash were handling over $250 billion in transactions globally. But for users who rely on these coins for true financial privacy, the landscape has changed dramatically. Governments aren’t just watching-they’re shutting down access. Exchanges are delisting them. Regulators are labeling them as high-risk. And in many places, using them is no longer just risky-it’s becoming impossible.

Why Monero and Zcash Are Targeted

Monero doesn’t give you a choice. Every transaction is private. Ring signatures mix your transaction with others. Stealth addresses hide where the money went. RingCT hides the amount. There’s no opt-out. That’s why regulators see it as a threat. If you can’t trace where money came from or where it’s going, you can’t enforce taxes, stop drug sales, or block terrorist funding. And that’s exactly what Monero does-by design.

Zcash is different. It lets you choose: public or private. You can send a transparent transaction like Bitcoin, or use zk-SNARKs to fully shield it. But here’s the catch: most users don’t use shielding. They stick with public addresses because they’re easier, faster, and compatible with wallets and exchanges. That means even though Zcash has the tech to be fully private, its real-world anonymity is weak. Regulators know this. They see Zcash as a hybrid-partially compliant, partially dangerous. And that makes it a target for partial bans.

What’s Actually Being Done

Over 97 countries have tightened rules around privacy coins since 2024. The biggest driver? The Financial Action Task Force (FATF) Travel Rule. Originally meant for traditional banks, it now requires crypto platforms to track and report transfers over $1,000. For Monero? Impossible. For Zcash? Only if you use transparent addresses. So exchanges had to choose: comply or lose access to global banking systems.

Binance and Kraken both removed Monero and Zcash from their platforms in early 2025. That wasn’t a coincidence. It was a legal necessity. Banks refused to process deposits from exchanges that still listed these coins. So the exchanges cut them loose. The result? A 19% spike in peer-to-peer (P2P) trading, especially in countries like Nigeria, Argentina, and Venezuela. People aren’t giving up-they’re just moving underground.

The European Union’s MiCA regulation made things worse. It requires all crypto assets to be traceable. Privacy coins don’t fit. So EU-based exchanges can’t list them. Even if a user wants to trade Monero, they can’t do it legally through a regulated platform in Germany, France, or Spain. That’s not a suggestion-it’s a legal ban.

The Real-World Impact

Darknet markets still use Monero. Fentanyl sellers on Abacus Market? They use it. Why? Because law enforcement can’t follow the money. That’s not theoretical-it’s documented. U.S. Treasury reports show Monero transactions linked to over 60% of crypto-related drug sales in 2024. That’s why the DEA and IRS are pushing for outright bans.

Zcash isn’t immune. Even though it offers transparency, its shielded transactions still show up on blockchain analysis tools. Researchers found that just 8% of Zcash addresses are shielded. That means 92% are public-and traceable. So when regulators demand KYC, users who care about privacy just stop using Zcash. That’s why Zcash’s active addresses dropped 8% in 2025. The tool exists, but the people aren’t using it.

Where Privacy Coins Still Survive

Not all countries are banning them. Singapore and Switzerland are running regulated sandboxes. These aren’t free-for-alls. They’re controlled environments where privacy coin developers can test new compliance tools under supervision. One project in Zurich is testing a version of Zcash that lets regulators decrypt specific transactions with a court order-without seeing all others. Think of it like a backdoor, but only usable by courts, not police.

These sandboxes aren’t loopholes-they’re experiments. If they work, they could become global models. If they fail, they’ll be shut down. But right now, they’re the only places where privacy coin innovation is still legal.

The Future: Compliance or Collapse?

The industry is trying to adapt. Some developers are working on selective disclosure-a way to prove you’re not laundering money without revealing your entire transaction history. Imagine showing a regulator: “Here’s proof this money came from a legal source,” but not showing where you got it from originally. It’s possible with advanced zero-knowledge proofs. But it’s not ready. And it’s expensive to run.

Most exchanges won’t adopt it. Too slow. Too costly. Too risky. So the pressure keeps building. Analysts predict another 20% drop in privacy coin listings by the end of 2026. Monero will likely stay on fewer than 10 major exchanges globally. Zcash might survive as a hybrid asset-mostly public, rarely private.

The real question isn’t whether privacy coins will disappear. It’s whether users will find new ways to use them. P2P markets, decentralized exchanges, and local cash trades are growing fast. In places where banking is unstable or corrupt, privacy coins aren’t a luxury-they’re a necessity.

What This Means for You

If you’re holding Monero or Zcash: you’re not alone. But you’re also not safe. Regulators are watching. Exchanges are removing support. Banks are cutting ties. Your wallet isn’t illegal-but moving money through regulated channels might be.

If you’re trading: avoid centralized exchanges. Use P2P platforms like LocalMonero or Bisq. They don’t require KYC. They don’t report to banks. But they come with risks: scams, no chargebacks, no customer service.

If you’re developing or investing: pay attention to Singapore and Switzerland. They’re the only places where privacy coin tech is still being built legally. Everything else is a holding pattern.

Privacy isn’t dead. But it’s been pushed to the edges. And the edges are getting narrower.