Why Exchanges Use Transparent Addresses
Most centralized exchanges (Coinbase, Kraken, Binance, Gemini) only support Zcash withdrawals to transparent (t) addresses. This is a technical limitation: exchange hot wallets are typically built on Bitcoin-like infrastructure that doesn't support shielded transactions. A handful of exchanges now support shielded withdrawals, but t-address remains the standard for 2025.
The result: when you withdraw ZEC from an exchange, the payout is publicly visible on-chain — the exchange's hot wallet address and your receiving t-address are both visible. This doesn't compromise your privacy permanently, as long as you shield promptly.
Exchange Withdrawal Support (2025)
| Exchange | Shielded Withdrawal? | Network |
|---|---|---|
| Coinbase | ⌠t-address only | Zcash mainnet |
| Kraken | ⌠t-address only | Zcash mainnet |
| Binance | ⌠t-address only | Zcash mainnet |
| Gemini | ⌠t-address only | Zcash mainnet |
| Sideshift.ai | ✅ Supports z-address | Zcash mainnet |
Step-by-Step: Shielding After Exchange Withdrawal
Step 1: Install a Shielded Wallet
Download Zashi (iOS/Android), YWallet, or Nighthawk (Android). Create a new wallet and securely store your 24-word seed phrase offline. All three wallets support automatic shielding.
Step 2: Get Your Transparent Receiving Address
In your wallet, look for a "Receive" option and specifically find or generate a transparent (t) address. This is the address you'll give to the exchange for withdrawal. In Zashi, you may need to tap your Unified Address and look for the transparent component, or use the "Receive to transparent" option.
Step 3: Withdraw from the Exchange
On the exchange, initiate a withdrawal to your t-address. Double-check the address — Zcash t-addresses start with "t1" (mainnet). Confirm the withdrawal and wait for blockchain confirmations (exchanges typically require 15–20 confirmations, taking about 20–25 minutes).
Step 4: Shield Your ZEC
Once your wallet shows the incoming balance (sync first if needed), look for a "Shield" or "Auto-shield" button:
- Zashi: Auto-shielding can be enabled; or tap the Shield button that appears when t-balance is detected
- YWallet: Tap the Shield icon from the main dashboard
- Nighthawk: A "Shield Funds" prompt appears automatically when transparent balance is detected
Confirm the transaction. The shielding fee is typically under $0.01 USD equivalent in ZEC.
Step 5: Confirm and Spend Privately
The shielding transaction confirms in ~75 seconds. After confirmation, your ZEC balance shows in your shielded (z) wallet, and all future transactions from that balance will be fully private z-to-z transactions.
Why This Works: Privacy After Shielding
The exchange withdrawal creates one public on-chain event: exchange → your t-address. Once you shield, the subsequent shielded pool activity is completely opaque. An observer can see "X ZEC shielded from t-address" but cannot follow the ZEC after it enters the shielded pool, as all subsequent z-to-z transactions hide amounts, senders, and recipients.