Jay Clayton, SEC Chairman

The murky world of Initial Coin Offerings (ICOs) was hit with alarming news during a cryptocurrency-related Senate committee hearing on Tuesday. That’s because SEC Chairman Jay Clayton said,“I believe every ICO I’ve seen is a security, You can call it a coin but if it functions as a security, it is a security. Those who engage in semantic gymnastics or elaborate re-structuring exercises in an effort to avoid having a coin be a security are squarely in the crosshairs of our enforcement provision.”

An ICO is a blockchain-based corporate event which is similar to an initial public offering. Rather than purchasing shares, as is the case in an IPO, investors in an ICO receive digital tokens instead of shares.

On the positive side, J. Christopher Giancarlo, the chairman of the CFTC who testified alongside the SEC chair, said “As we saw with the development of the Internet, we cannot put the technology genie back in the bottle. Virtual currencies mark a paradigm shift in how we think about payments, traditional financial processes, and engaging in economic activity. Ignoring these developments will not make them go away, nor is it a responsible regulatory response.”

It’s like Bitcoin but with more anonymity. It’s also known as Zcash

Touted as an alternative to BitCoin, Zcash is another decentralized and open source cryptocurrency and its major sell is encrypted anonymity and privacy.

The currency was first proposed in an academic paper in 2014 by researchers from Johns Hopkins University, Massachusetts Institute of Technology, UC Berkeley, Tel Aviv University and Technion and is now in alpha-testing phase, to be officially launched in July.

The currency uses technology called ‘zero-knowledge proofs’ in cryptography which allows one party to authenticate a transaction or validate a statement by another party without giving away any information about themselves, reports Fast Company.

It aims to take the philosophy of bitcoin and extend it to become more anonymous. “Zerocash extends the protocol and software underlying Bitcoin by adding new, privacy-preserving payments,” the company blog noted.

Operationally, the currency runs on an open source system. The total money supply is capped at 21 million, similar to BitCoin but when it comes to redistribution, 10 percent of the total amount will go to the founders, investors, employees and advisors where the agreed to give 1% of the total number to the non-profit Zcash Foundation to maintain and develop protocols and software.

Its investors include Pantera Capital, Digital Currency Group and Fenbushi Capital among BitCoin and cryptocurrency investors and angel investors like Naval Ravikant of AngelList and Bitcoin angel investor Roger Ver.