Arkham’s Zcash Privacy Tracking Claims Spark Controversy: Misleading Users or Market Manipulation?

Arkham Intelligence faces a firestorm of criticism over its claims about tracking Zcash transactions—allegations that cut to the heart of privacy in crypto.

Privacy Promises vs. Surveillance Realities

The platform's bold assertions about piercing Zcash's privacy layers triggered immediate backlash from the privacy-focused community. Experts argue the methodology remains opaque, raising questions about whether the claims represent a genuine breakthrough or clever marketing designed to attract attention—and capital.

The Transparency Paradox

Blockchain analytics firms walk a tightrope: providing transparency for security and compliance while respecting the fundamental privacy tenets of certain cryptocurrencies. This incident exposes the tension between surveillance for 'safety' and the erosion of financial anonymity—a core selling point for assets like Zcash.

Market Motives in the Spotlight

Skeptics view the announcement through a cynical lens. In a sector where hype often drives valuation, dramatic claims from data firms can create market-moving narratives. It's a reminder that in crypto, sometimes the most profitable trade isn't in the token, but in selling the shovels—or in this case, the alleged ability to see where others dig.

The controversy leaves users questioning not just what can be tracked, but the motivations behind the tracking claims themselves.

Arkham is bullish on its Zcash dashboard

Arkham’s post on X claims it has labeled over half of the privacy chain Zcash’s shielded and unshielded transactions, which accounts for $420 billion of volume linked to known individuals and institutions.

“Track $ZEC transactions, entities, and balances on Arkham,” the post encouraged. However, what it did was stoke the flames of a rebuff from the general crypto community, and especially the Zcash privacy proponents. 

“Arkham has linked half of all Zcash activity to entities,” the thread continued. 

Arkham reports that it has labeled 53% of all Zcash transactions, with 48% of all inputs and outputs attributed to an entity, while 37% of all balances are labeled ($2.5 billion). 

To demonstrate the capability, Arkham revealed that the US Government is sitting on $737,000 worth of ZEC, which it confiscated from AlphaBay founder Alexandre Cazes 8 years ago.

“That $737K has now doubled in value, held by the US Government for the past 8 years,” Arkham wrote. 

Whether or not these things are true to the extent the post has implied is subject to future judgment. However, the backlash that erupted immediately on X, primarily from Zcash advocates, developers, and privacy maximalists, was due to Arkham’s wording. 

Mert Mumtaz and others line up to criticize Arkham 

Mert Mumtaz, Helius Labs’ CEO, was one of those who attacked Arkham over the polarizing post regarding Zcash and its shielded transactions. 

Zcash’s shielded transactions famously hide the sender, receiver, and amount while still verifying validity on the blockchain, a merit that has been Zcash’s selling point since its inception and that has made it very popular in recent times. 

Mert did not like Arkham’s wording. The Helius Labs CEO said as much in a post he shared after. “These guys did not label shielded txns (since impossible) but threw that in there for a quick click boost,” he wrote. “For a data org, that’s as scammy as it gets. Clicks over truth. Once you lose credibility, good luck getting it back. Not so surprising for a team w a shitcoin ig.”

Under the official Arkham post, he made sure to share his two cents as well, calling the post out for what he tagged “a scummy clickbait title.”

“You obviously have not been able to do jack all to shielded txns, but you include in there for a few clicks, you’ve now shown the world you’re a dishonest scam ofg, let’s see how that short-term game plays out.” 

Others in the comment section had the same sentiment, with many pointing out that what Arkham is actually able to track are the “transparent addresses” on Zcash, which fall under public data, unlike truly shielded addresses, which Arkham merely categorises as “Shielded” or “Unknown” without revealing contents. 

This WOULD mean no cryptographic breakthrough happened, and shielded privacy on Zcash remains intact because there simply isn’t any data to trace.

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