The U.S. Securities and Exchange Commission has closed its investigation into the Zcash Foundation without recommending any enforcement action, marking a significant moment for privacy coin advocates.
Key Takeaways
- The SEC ended its 2023 investigation into the Zcash Foundation with no enforcement action.
- The probe was part of a broader review into digital asset offerings under former SEC Chair Gary Gensler.
- This comes amid a shift in regulatory tone under the Trump administration’s crypto-friendlier SEC leadership.
- Despite recent internal turmoil at Electric Coin Company, Zcash’s development continues through the Foundation.
What Happened?
The Zcash Foundation announced this week that the SEC concluded its review tied to a 2023 subpoena and will not be taking enforcement action. The investigation was part of a wider inquiry titled “In the Matter of Certain Crypto Asset Offerings” that targeted various digital asset issuers. The Foundation emphasized that this outcome reflects its commitment to compliance and transparency.
We are pleased to announce that the SEC has concluded its review and informed us that it does not intend to recommend any enforcement action or other changes against Zcash Foundation regarding this matter. https://t.co/zjxfh3mmst
— Zcash Foundation 🛡️ (@ZcashFoundation) January 14, 2026
SEC Wraps 2023 Crypto Probe Into Zcash Foundation
In a blog post published Wednesday, the Virginia-based Zcash Foundation shared that the SEC had formally closed its 2023 investigation without recommending charges. The inquiry began in August 2023, during the tenure of then-SEC Chair Gary Gensler, who was known for his tougher stance on the crypto sector.
The review was part of a broad regulatory initiative aimed at crypto asset issuers, but Zcash Foundation officials say they fully complied with the subpoena and the process, reiterating their focus on building privacy-preserving financial infrastructure. They stated, “This outcome reflects our commitment to transparency and compliance with applicable regulatory requirements.”
A New Regulatory Climate for Crypto
The SEC’s decision comes at a time when the regulatory environment appears to be softening under the re-elected Trump administration. With Paul Atkins now heading the SEC and Commissioner Hester Peirce leading a crypto-focused task force, the agency has backed away from several major enforcement actions, including high-profile cases against Coinbase and Ripple.
Industry observers see this as a turning point in how the government approaches blockchain projects. The regulatory shift away from “enforcement-first” to more collaborative engagement signals a more open environment for blockchain development in the U.S.
Notably, last month’s roundtable hosted by Hester Peirce’s task force spotlighted privacy and surveillance concerns. Zcash founder Zooko Wilcox was invited to speak and shared personal remarks on the importance of financial privacy, even referencing a prior SEC investigation against him and his former company, Electric Coin Company (ECC), as unjust and damaging.
Internal Shakeups and Price Volatility
While the Foundation celebrates the regulatory win, the broader Zcash ecosystem has faced turbulence. Earlier this month, the entire team at ECC, the company originally behind the creation of Zcash, resigned amid conflict with the pro-Zcash nonprofit Bootstrap. ECC’s then-CEO Josh Swihart described the exit as a “constructive firing.”
The dramatic departure led to a sharp decline in Zcash’s price, falling by over 18 percent in 24 hours. However, the coin had previously surged, doubling in value over the prior three months despite overall sluggish crypto market conditions.
In response to ECC’s exit, the Zcash Foundation stressed that the protocol’s future does not hinge on a single organization. “The network’s resilience and future are not tied to any single organization’s fate,” it stated in a follow-up blog post.
Legislation in the Pipeline
Coinciding with this regulatory update, the U.S. Senate is reviewing major legislation aimed at clarifying how digital assets will be overseen. The Senate Banking Committee is set to consider the CLARITY Act and the Responsible Financial Innovation Act, which aim to establish a clear division of authority between the SEC and the Commodity Futures Trading Commission (CFTC). These bills could bring more certainty to projects like Zcash.
CoinLaw’s Takeaway
In my experience covering crypto regulation, this kind of SEC closure without enforcement is a big win, especially for a privacy-focused project like Zcash. It shows that even in a climate of heightened regulatory concern, working transparently and engaging with regulators can yield positive outcomes. I found the shift in tone under the new SEC leadership refreshing. It could breathe new life into innovation in the space, especially for projects that prioritize user privacy. For Zcash, this is more than just relief but it’s a chance to refocus on its mission without the weight of a looming legal battle.
