The U.S. Securities and Exchange Commission has concluded its investigation into the Zcash Foundation (ZEC) and will take no enforcement action, ending a probe that began in August 2023 over whether elements of the privacy-focused project’s funding and governance may have violated U.S. securities laws.
The decision removes a regulatory overhang that had weighed on the Zcash ecosystem for more than two years.
The SEC’s decision comes against a backdrop of broader shifts in U.S. crypto enforcement policy under the Trump administration, during which the agency has dropped or paused a significant portion of cryptocurrency-related cases.
The SEC dismissed, paused or reduced enforcement actions in more than 60% of active crypto cases after President Donald Trump returned to office, a stark contrast with prior enforcement patterns, particularly under the previous chair.
Years-Long Probe Ends With No Charges
The Zcash Foundation announced that the SEC informed it it would not recommend any enforcement action or regulatory changes related to the inquiry designated “In the Matter of Certain Crypto Asset Offerings (SF-04569)”.
The subpoena issued in August 2023 sought information on potential securities law implications tied to Zcash’s governance and token distribution mechanisms.
The resolution removes legal uncertainty that had shadowed the project and coincides with renewed market interest in privacy-focused digital assets.
ZEC’s price rallied following the announcement, trading up over 12% over the last 24 hours, according to CoinGecko.
Governance Turmoil Weighs On Zcash Ecosystem
The regulatory relief arrives at a turbulent moment for the Zcash community.
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Over the past few weeks, the protocol has been beset by internal governance conflict.
The entire core development team at Electric Coin Company (ECC) resigned after disputes with the nonprofit Bootstrap board over mission alignment and governance, prompting a sharp sell-off in ZEC’s price and raising questions about project stability.
Developer activity tied to Zcash has fallen to its lowest levels in years, coinciding with a roughly 40% drop in ZEC’s market value over two months as of early January 2026, according to on-chain analytics.
The exits have also sparked the launch of a new wallet project by some former developers, underscoring fractures within the ecosystem.
In parallel, Monero (XMR), another privacy-focused asset, has regained prominence in recent trading, reclaiming the top position among privacy coins by market capitalization as Zcash experiences headwinds.
Enforcement Landscape Shifts Amid Political Change
The conclusion of the Zcash probe reflects a broader regulatory shift.
Under Trump’s administration, the SEC has shown a pattern of scaling back or dismissing high-profile enforcement actions initiated under earlier leadership.
For example, the agency withdrew its civil lawsuit against Binance, one of the most consequential crypto enforcement actions in recent years and similarly moved to drop or pause cases involving other major firms.
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