Zcash Foundation in Clear Legal Position: SEC Ends Year-Long Investigation Without Taking Any Enforcement Action

The Zcash Foundation announced this week that a years-long investigation by the U.S. Securities and Exchange Commission has concluded without any enforcement action, leading to regulatory clarity for one of the cryptocurrency industry’s most closely watched privacy projects at a time of increased token volatility.

The SEC confirmed in a statement released Wednesday that it had “concluded its review” of an investigation related to “certain crypto asset offerings.”

The investigation began in August 2023, when the Foundation received a subpoena as part of a broader effort by the SEC to evaluate whether specific digital asset offerings fell under federal securities laws.

The case was filed internally as SF-04569 and remained open for more than two years.

Zcash’s privacy model is back in the spotlight after an SEC review ends

The organization said the outcome reflects its cooperation throughout the process and its focus on meeting existing regulatory requirements.

She added that her work will remain focused on developing a financial infrastructure that preserves privacy. The U.S. Securities and Exchange Commission has not issued a public statement on the matter, but the institution said it had received confirmation that the review was officially closed.

The move comes amid renewed market activity around Zcash, with ZEC trading at around $439 on Wednesday, up almost 13% from the last trading period, with 24-hour trading volume up more than 30% to around $881 million.

Despite the rally, the cryptocurrency remains well below its early-cycle high, trading more than 86% below its all-time high of $3,191 set during the 2017 bull market.

One of the most popular aspects of privacy-focused cryptocurrencies is the regulatory oversight of these initiatives, which rely on cryptographic solutions to hide transaction-related information and remain effective on the open blockchain.

Launched in 2016, Zcash uses zero-knowledge proof to allow users to make protected transactions without revealing information about the sender, recipient, or amount.

This design placed the system in the middle of multiple debates over financial oversight, compliance, and the limits of privacy on blockchain.

SEC Decision on Zcash: Reflects Evolving Approach to US Regulation

The SEC’s examination of Zcash took place in conjunction with other investigations into the ecosystem.

In previous correspondence, the agency requested an analysis from Grayscale Investments on whether ZECs could be classified as securities in the context of its Zcash Trust.

SEC officials also communicated directly with Zcash founder Zuko Wilcox, including participating in roundtable discussions on privacy technology and regulatory oversight.

The closure of the investigation into the Zcash affair is also part of a broader change in the application of cryptocurrency laws in the United States since 2025.

Under new leadership and after Paul Atkins was named SEC chairman, the SEC dropped or settled a series of high-profile cases brought under the previous administration.

Lawsuits against Coinbase and Kraken were dismissed without penalty, investigations into Robinhood’s cryptocurrency unit Uniswap Labs, OpenSea and Gemini were closed and a multi-year investigation into Ondo Finance concluded without charges late last year.

As the SEC has continued to pursue cases related to alleged fraud, trends have indicated a retreat from broad enforcement actions associated solely with token classification.

The conclusion of the SEC investigation comes at a time of internal turmoil for Zcash, as management conflicts between Electric Coin Company and nonprofit Bootstrap last week escalated into a public split, with the main developers leaving to form a new independent entity.

This incident briefly weighed on market sentiment, even as network operations continued uninterrupted and project managers stressed that the conflict did not affect Zcash’s basic security or privacy guarantees.

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