CryptoReflexions#18 - The Return of Privacy Coins.

Hello everyone,

Today, a reflection on the return of privacy coins — and what it concretely implies from a legal and tax perspective in Belgium.

Interested?

Let’s go!

The Return of Privacy Coins

Zero-knowledge proofs (ZKPs) are transforming the way transactions are secured. The launch of the Zashi wallet recently democratized access to confidential transactions for the general public, putting privacy coins — and Zcash in particular — back in the spotlight.

But what does this return mean in an increasingly structured European regulatory context?

Legal Framework in Belgium

Privacy coins are not prohibited in Belgium or in the EU. That said, regulated intermediaries are required to apply enhanced anti-money laundering measures when confronted with untraceable transactions.

MiCA regulation imposes minimum traceability without explicitly prohibiting privacy. Users who go through regulated exchanges will therefore encounter additional verifications. Decentralized solutions remain, for now, less subject to these controls.

What Confidentiality Does Not Change

Technological confidentiality does not erase the obligation to be able to document capital gains. Regardless of the network used, declaratory obligations remain fully in effect.

Take the example of Lea, a Belgian investor who buys ZEC via a DEX and sells it three years later. She remains required to keep proof of acquisition and to correctly calculate the taxable capital gain — even if the transaction is technically opaque to a third party.

Conclusion

Privacy on blockchain is an increasingly accessible technological reality. But it does not constitute a tax shield. The confidentiality of a transaction and its tax treatment are two distinct questions — and it is better not to confuse them.

To go further: cryptomonnaie.be — The cryptocurrency blog in Belgium | Newsletter CryptoBelgique — Stay informed about news and updates

Florian ERNOTTE Lawyer 👉more infos about what i do