Gemini, a crypto exchange based in New York City that is run by the Winklevoss Twins, has declared that it will support shielded Zcash (ZEC) withdrawals, and this is branded as a win for privacy. However, this actually is not a win for privacy at all, and users will completely lack anonymity.
Essentially, Zcash (ZEC) transactions are either transparent or shielded, with shielded transactions having a public destination/origin address like Bitcoin (BTC), and shielded transactions having a private destination/origin addresses similar to Monero (XMR).
Typically crypto exchanges do not allow shielded Zcash (ZEC) deposits or withdrawals due to anti-money laundering regulations, so in that sense Gemini’s move to allow shielded withdrawals is groundbreaking.
However, it is well known that blockchain forensics have mostly compromised the anonymity of Zcash (ZEC), since the transparent transactions on the Zcash (ZEC) network have made it possible for blockchain forensics firms to de-anonymize the shielded transactions as well.
Further, people withdrawing Zcash (ZEC) on Gemini are required to fully hand over their identity before using Gemini anyway, so even if they withdraw to a shielded address, it won’t be anonymous.
In fact, this action to allow shielded Zcash (ZEC) withdrawals on Gemini may allow blockchain forensics firms to make even more in-roads into the Zcash (ZEC) network, since the anonymity-oriented Zcash (ZEC) users on Gemini will automatically be identified.
Thus, Gemini has added shielded Zcash (ZEC) transactions, which is an unusual move and seems to increase privacy of users, but in reality it does nothing to increase privacy.
On a final note, there won’t be true anonymity on centralized crypto exchanges until Monero (XMR) is added, which will probably never happen since Monero (XMR) is non-compliant with anti-money laundering regulations.