ZEC achieved a counter-trend surge in 2025, with an increase of over 1160%, prompting many to reevaluate the value of privacy coins. But if you only focus on the rally, you miss the real risk signals—regulatory issues are approaching.

Global regulators have recently started targeting privacy coins. The EU's Anti-Money Laundering Regulation (AMLR) will take effect next July, explicitly pointing to the possible ban of cryptocurrencies that "enhance anonymity," with ZEC prominently listed. Not just the EU: Japan has been restricting privacy coins since 2018, South Korea outright banned anonymous tokens in 2021, and Dubai excluded privacy coins from its compliance framework in 2023. These regulatory measures share a common logic—the more regulated the market, the lower the tolerance for privacy coins.

Although ZEC was designed with a "transparent + shielded" dual mode to strike a balance, which sounds clever, regulators are not impressed by this logic. The so-called "view key" mechanism is essentially selective disclosure, which still raises compliance concerns. Since 2025, major exchanges like Kraken and other large platforms have begun delisting ZEC trading pairs. As a result, ZEC's liquidity increasingly depends on decentralized exchanges and small platforms, leading to obvious issues caused by fragmented liquidity—large slippage and easy price manipulation. If regulations tighten further, ZEC may follow the old path of Monero.

This rally is enjoyable, but don't forget that risks are just around the corner.