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The U.S. Securities and Exchange Commission has formally closed the Zcash foundation probe, concluding a multi-year review without recommending enforcement action, the Zcash Foundation disclosed on Jan. 14.
The decision, which ends an investigation that began in 2023, provides regulatory clarity for one of the crypto sector’s most prominent privacy-focused projects and removes a long-standing source of uncertainty for its ecosystem.
The Zcash foundation probe centered on whether aspects of Zcash’s funding structure and governance raised securities law concerns.
With the SEC now stepping back, the outcome marks a significant moment not only for the foundation but also for privacy-oriented digital assets more broadly, as investors and developers assess how U.S. regulators are recalibrating their approach.
According to the foundation, the SEC informed it that “no charges or corrective measures would be pursued” in connection with the inquiry, effectively bringing the Zcash foundation probe to an end.
The regulator did not recommend enforcement action or regulatory changes following its review.
The investigation dates back to Aug. 31, 2023, when the foundation received a subpoena tied to an SEC matter titled “In the Matter of Certain Crypto Asset Offerings (SF-04569).” That subpoena launched the Zcash foundation probe, focusing on potential securities issues related to how Zcash was funded and governed.
In a public disclosure, the Zcash Foundation said the decision reflects its long-standing commitment to transparency and regulatory compliance. It added that the organization remains focused on building financial tools for the public that prioritize user privacy while remaining within legal boundaries.
For the foundation, the closure of the Zcash foundation probe ends more than two years of regulatory scrutiny that had hovered over its operations and development roadmap.
The conclusion of the Zcash foundation probe triggered an immediate market reaction. Zcash’s native token, ZEC, rose sharply after the announcement, climbing by roughly 10% to 14% as trading activity increased. Market participants interpreted the move as a sign of renewed confidence following the removal of a key regulatory risk.
Since the subpoena was issued in 2023, the Zcash ecosystem had been operating under heightened uncertainty, with investors wary of how the Zcash foundation probe might conclude. The SEC’s decision to close the case without action eased those concerns and contributed to the price surge.
Zcash is best known for its shielded transactions, which allow on-chain verification while keeping transaction details confidential. Supporters argue this feature offers a privacy-preserving alternative to fully transparent blockchains, while critics have raised concerns about potential misuse.
The end of the Zcash foundation probe suggests that, at least in this case, regulators did not find sufficient grounds to pursue enforcement related to those design choices.
The outcome of the Zcash foundation probe also fits into a broader pattern of the SEC stepping back from certain crypto-related cases. Several recent investigations involving digital asset firms have concluded without enforcement, signaling what some observers view as a softer or more selective regulatory posture.
At the same time, the resolution comes amid internal changes within the Zcash ecosystem. Earlier this month, the full development team at , which has historically led core Zcash development, resigned following a governance dispute with its overseeing nonprofit board.
Former leadership described the situation as a breakdown in working conditions, prompting the team to depart and form a new company focused on privacy-centric tools.
Shortly after leaving, the developers announced plans for a new wallet, cashZ, built on existing Zcash technology and designed to allow users to migrate easily. While these governance challenges remain unresolved, the end of the Zcash foundation probe removes a major external pressure point as the foundation and broader community chart their next steps.
As 2026 begins, privacy-focused cryptocurrencies have shown renewed momentum, with Zcash emerging as one of the beneficiaries of shifting sentiment. The closure of the Zcash foundation probe does not resolve every question facing the project, but it does eliminate a significant regulatory overhang that had shaped perceptions of its future.
