The U.S. Securities and Exchange Commission has ended its review of the Zcash Foundation without recommending enforcement action, the nonprofit confirmed Wednesday.
According to the foundation, the inquiry began in August 2023, when the SEC issued a subpoena tied to digital asset-related activity. The review was opened while the agency was led by former chair Gary Gensler. This week, regulators informed the organization that no charges would follow.
An SEC spokesperson declined to comment, repeating the agency’s standard position on ongoing or concluded investigations.
Price reaction follows confirmation
Zcash moved higher after the disclosure became public. ZEC rose more than 12% over 24 hours, trading around $440, based on CoinGecko data. The token has also posted strong gains over the past several months, outperforming parts of the broader market during a period of uneven sentiment.
Traders appeared to react less to long-term implications and more to the immediate removal of regulatory uncertainty, according to market participants tracking privacy assets.
How the foundation positions itself
In its statement, the Zcash Foundation emphasized that it operates as a nonprofit and does not control Zcash’s issuance mechanics or monetary parameters. Its role, it said, centers on maintaining the protocol and supporting development work around the network.
The organization added that its engagement with regulators during the review was cooperative and ongoing, and that the SEC’s decision does not alter how the foundation operates going forward.
Electric coin company fallout still fresh
The regulatory update arrives against the backdrop of internal disruption elsewhere in the Zcash ecosystem. Earlier this month, Electric Coin Company (ECC) the primary developer behind Zcash, saw its entire staff depart following a dispute involving Bootstrap, a Zcash-aligned nonprofit.
ECC CEO Josh Swihart described the event as a constructive termination and said the former team intends to launch a new company focused on private digital money. ZEC briefly weakened after the announcement, allowing Monero to retake its lead among privacy-focused cryptocurrencies by market value.
In response, the Zcash Foundation said the protocol’s operation does not depend on any single corporate entity.
Privacy tech remains under scrutiny
Zcash’s privacy model has drawn regulatory attention before. Last month, protocol creator Zooko Wilcox participated in an SEC roundtable on privacy and surveillance, where he said both he and ECC had previously been investigated for fraud-related concerns.
Wilcox told attendees that documentation was provided to regulators and no follow-up action occurred. Zcash relies on zero-knowledge proofs to shield transaction details, while allowing users to selectively disclose information through viewing keys when required.
Enforcement posture looks different under new leadership
Since Paul Atkins took over as SEC chair following Donald Trump’s return to office, the agency has closed or stepped back from multiple crypto-related investigations. Cases involving Coinbase, Ripple, and several DeFi projects have been narrowed or dropped outright.
Rather than issuing new rules, the SEC has focused on resolving older probes, particularly those tied to activity launched during earlier enforcement campaigns.
Crypto organizations reassess the U.S.
Zcash is not alone in reassessing its regulatory footing. Over the past year, several crypto foundations have moved operations back to the United States or expanded domestic presence. The Algorand Foundation relocated from Singapore, while Jito Foundation cited a shift in regulatory tone when announcing its return.
Other firms, including Tether and Polymarket, have also signaled renewed interest in U.S.-based operations following years of offshore focus.
For the Zcash Foundation, the SEC’s decision closes a multi-year review without penalties, leaving the protocol’s development path unchanged.
Matvii Diadkov
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