Over the last 24 hours, the price of the cryptocurrency Zcash (ZEC -12.39%) has traded with volatility. It was nearly 13% higher at one point before reversing course and going nearly 13% down as of 2:30 p.m. ET today. The moves come after the public recently learned that the well-known whistleblower Edward Snowden helped create the network.
Snowden formerly worked for the National Security Agency (NSA) as an employee and subcontractor. In 2013, he leaked classified intelligence that revealed details of many government-run surveillance programs, which stirred controversy over whether government agencies like the NSA had overreached and infringed on privacy rights. Snowden currently lives in Russia, where he has been granted residency; he would face espionage charges if he returned to the U.S.
The revelation about Snowden’s role in Zcash came from a leaked video that showed he was one of six people who helped create the Zcash network in 2016.
“I saw [Zcash] being worked on by a number of trusted academic cryptographers and I thought it was a very interesting project,” Snowden says in the video, first reported on by Forbes. Snowden would go on to participate in a “ceremony” that created Zcash’s “trusted setup.”
Snowden’s participation as a founder sort of makes sense, considering the Zcash network focuses on privacy. On normal crypto networks, while transactions can be hard to trace, they are effectively open for anyone to see.
On Zcash, users have the option to conduct transactions publicly or privately. They can use a private “Z-address” or a public “T-address.” Transactions sent between two Z-addresses encrypts the transaction amounts and memos, shielding them from public view. Transactions can be sent between Z-addresses and T-addresses.
It’s hard to say whether having Snowden’s involvement revealed is a good or bad thing. On one hand, it does add legitimacy to Zcash given what Snowden stands for and from a technical perspective, given how smart he is.
On the other hand, Snowden’s involvement could attract more regulatory scrutiny, considering how controversial he is. I imagine there is a group of lawmakers and regulators who would like to see him charged with espionage, which could draw more scrutiny to the network.
Already, recent legislation by the European Union seeks to require crypto networks to collect and share data regarding transactions made across their networks, which could hurt the appeal of a network and token like Zcash.