In a recent commentary that has ignited the ongoing debate over privacy coins, Canary Capital CEO Steven McClurg has harshly criticized Zcash, dubbing its recent price surge a “pump and dump” and warning investors of a possible rug-pull. Simultaneously, he has positioned Litecoin as his preferred privacy asset suitable for regulated markets.
Litecoin: A More Reliable Privacy Option?
Expressing thoughts through a series of posts on X, McClurg expressed skepticism about the Zcash (ZEC) rally that began approximately two months ago, stating that it piqued his interest enough to revisit the project for the first time since 2016–2017. Despite previously buying into the Zcash narrative, he reached two crucial conclusions regarding the project.
According to McClurg, “Litecoin has broader reach in terms of users, and MWEB is an easier tool for selecting private wallets/transactions. It is my choice for privacy in the US or UK due to compliance.” In stark contrast, he remarked that ZEC represents a “pump and dump getting ready to rug-pull. Be careful out there,” highlighting the speculative and potentially dangerous trading atmosphere surrounding the coin.
Following his critical assessment, McClurg pointed out Zcash’s dramatic decline on Monday, noting, “Zcash is down 50% since this post. I hope people saw the post survived the rug pull. There is still further down to go,” while attributing this market behavior to actions by what he refers to as “bad actors.” His focus, however, remained on market behavior rather than the project’s fundamental design.
Despite his candid criticisms, McClurg clarified that his views do not equate to a rejection of Zcash’s underlying technology. “Btw, I have nothing against ZEC, as it was the first currency with a private/public option,” he remarked, positioning himself as “long-term bullish on Litecoin, Monero, Dash, and Zcash in that order,” with ZEC notably placed last in his privacy coin hierarchy.
The crux of McClurg’s argument lies in how each coin implements privacy and navigates compliance challenges. Litecoin’s MimbleWimble Extension Block (MWEB) offers an optional confidential layer alongside its transparent base chain, allowing users the flexibility to manage their private transactions while keeping overall supply auditable. This capability, coupled with a wider distribution and better exchange support, reinforces his assertion that Litecoin is indeed “my choice for privacy in the US or UK.”
When the topic of Monero arose, McClurg acknowledged he hasn’t delved into it for several years but opined that it could be the preferred cryptocurrency for individuals in authoritarian regimes due to its emphasis on pure privacy. Nevertheless, he noted with regret that Monero may not comply with US regulations, reflecting the common dichotomy encountered between privacy and enforcement in the cryptocurrency landscape.
Zcash is noted for its hybrid approach, featuring both transparent and shielded addresses. McClurg’s insights imply that the recent fluctuations in the ZEC market reveal underlying vulnerabilities in market behavior rather than flaws in the technology itself, even as he retains an appreciation for its cryptographic innovation.
McClurg concluded by expressing hope that the current turmoil caused by speculative excess has not overshadowed the importance of privacy chains and their features, clarifying his critique targets market misconduct rather than the genuine pursuit of financial privacy.
As of the latest update, Zcash (ZEC) is trading at approximately $324.
