Zcash Foundation Says SEC Ends Investigation With No Enforcement Action

The Zcash Foundation said on Wednesday that the U.S. Securities and Exchange Commission has ended a probe into the nonprofit organization without recommending enforcement action.

In a blog post, the Virginia-based organization said that it had been alerted to a review by the regulator in August 2023, which pertained to the offering of digital assets. At the time, the SEC was led by former chair and crypto critic Gary Gensler.

The Zcash Foundation said that the review’s outcome, where charges weren’t recommended against the organization, underscores its “commitment to transparency and compliance with applicable regulatory requirements.”

The organization said that it remains focused on “advancing privacy-preserving financial infrastructure for the public good,” alongside efforts to steward Zcash as a protocol.

Zcash changed hands around $437, a 12% increase over the past day, according to CoinGecko. Despite tepid crypto market conditions following Bitcoin setting its most recent all-time high above $126,000 in October, Zcash’s price has nearly doubled over the past three months.

“The SEC does not comment on the existence or nonexistence of a possible investigation,” the regulator said when reached by Decrypt on Wednesday.

The development underscores how the SEC’s treatment of crypto-native entities has shifted substantially since the re-election of U.S. President Donald Trump, who appointed Chair Paul Atkins to reshape how Wall Street’s top cop approached the industry. Under his leadership, the SEC has backed away from investigations into companies including Coinbase and Ripple.

As some members of the crypto industry have warned of a crackdown on privacy-preserving tools, including coin mixers, the SEC’s tone has changed. Last month, SEC Commissioner Hester Peirce’s crypto task force held a roundtable on surveillance and privacy.

Zcash founder Zooko Wilcox was among those invited to speak. At the event, he read a statement from his mom arguing “financial surveillance makes us all a guinea pig.”

At the time, Wilcox explained how the SEC had launched an investigation against him and his company “for fraud.” Wilcox is the former CEO of Electric Coin Company, which built Zcash, and is a separate entity from the Zcash Foundation.

“It was unjust, and it was an insult to my character,” he said. “We sent them all the information their subpoena requested, and then we never heard back.”

The Zcash Foundation’s statement follows a dramatic exit of employees from Electric Coin Company earlier this month. ECC CEO Josh Swihat said the company’s entire team had been “constructively fired” over disagreements with a pro-Zcash nonprofit called Bootstrap.

The move prompted a drop in Zcash’s price, with Swihart and the team saying that they would be founding a new company to continue “building unstoppable private money.”

The following day, the Zcash Foundation moved to address the fallout, saying in a blog post that “the network’s resilience and future are not tied to any single organization’s fate.”

Editor’s note: This story was updated with additional details and SEC statement after publication, and corrected to note that existence of the investigation was shared ahead of Wednesday’s announcement by Zooko Wilcox.