SEC Closes Zcash Foundation Probe with No Enforcement After Two-Year Review

Highlights:

• SEC has ended its Zcash Foundation probe without charges, closing a review that began with a 2023 subpoena.
• The ZEC price and trading volume rose after the SEC closed its review, easing a major regulatory overhang.
• The decision reflects a broader SEC pullback from token classification cases under new leadership.

The Zcash Foundation said that the U.S. Securities and Exchange Commission has closed a long-running investigation without taking enforcement action. The foundation disclosed the decision on Jan. 14 after receiving confirmation from the regulator. The inquiry focused on certain crypto asset offerings linked to the organization. According to the foundation, the review remained open for more than two years. The SEC did not issue a public statement on the outcome.

The investigation began on August 31, 2023, when the foundation received a subpoena tied to an internal SEC matter labeled SF-04569. At the time, the agency examined whether specific digital asset offerings fell under federal securities laws. Lawmakers and regulators had intensified scrutiny across the crypto sector during that period. The foundation said it cooperated fully and provided all requested information. It added that the review concluded without charges or corrective measures.

The foundation said the outcome removes a major regulatory overhang that had followed the project. It stated that it will continue operating within existing legal requirements. The organization also reaffirmed its focus on privacy-preserving financial infrastructure. Throughout the review period, it continued supporting the Zcash protocol without operational disruption. As a result, the closure ends one of the most closely watched privacy-related probes involving a crypto nonprofit.

SEC Closes Zcash Foundation Case as Zcash Privacy Tech Regains Attention

Zcash is based on zero-knowledge proofs, which facilitate shielded transactions on a public blockchain. The design enables users to confirm transactions without revealing details of the senders, receivers, or the amount. Since its introduction in 2016, Zcash has been at the center of the debate regarding surveillance and compliance. Regulators have repeatedly questioned how privacy tools fit within existing financial oversight frameworks. The end of the SEC review has renewed attention on these unresolved policy questions.

The market activity increased shortly after the foundation disclosed the decision. ZEC is trading at $438, reflecting gains of roughly 5.63%. The trading volume also climbed more than 6.27% to about $801 million. Despite the rebound, the token remains far below its 2017 peak near $3,191. ZEC is still trading more than 86% below that earlier high.

The SEC previously sought analysis from Grayscale Investments on whether ZEC could qualify as a security within its Zcash Trust product. Agency officials also engaged directly with Zcash founder Zooko Wilcox during public discussions on privacy technologies.

Wilcox has stated that regulators launched a separate inquiry against him and his company during that period. He said his team complied with all requests but received no follow-up for months. The closed review signals that the agency chose not to pursue classification claims tied to the foundation.

Wider SEC Shift and Zcash Governance Issues Add Context

The Zcash ruling is part of a bigger trend in crypto enforcement in the United States since 2025. The SEC, led by Chair Paul Atkins has either, in various cases, dropped or settled high-profile crypto cases. They involve the lawsuits against Coinbase and Kraken that did not result in penalties. Investigations of Robinhood, Uniswap Labs, OpenSea, and Gemini also ended without charges.

The regulatory decision comes at a time when the Zcash ecosystem faces internal tension. A dispute between the Electric Coin Company and the nonprofit organization that governed it resulted in a civil rift. The core developers quit and stated that they would create a new company whose theme was to be based on privacy tools. The group also disclosed a new wallet, cashZ, developed based on the current Zcash technology.