The entire development team at Electric Coin Company (ECC), the company behind privacy coin Zcash (ZEC), has resigned. CEO Josh Swihart announced the mass resignation and spoke of a constructive dismissal by the Bootstrap board.
The incident shakes the privacy coin industry and has immediate effects on the market dynamics between Zcash and Monero. ECC was the main developer behind Zcash (ZEC), one of the leading privacy coins with a market capitalization of over $6 billion. The resignation of the entire team raises fundamental questions about the future of the project, even though the protocol itself remains functional.
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Governance crisis leads to rupture
The conflict between the ECC team and the Bootstrap board escalated in the first days of January 2026. Bootstrap is a nonprofit organization under U.S. law (501(c)(3)) that was founded in 2020 to oversee ECC and support the Zcash ecosystem. At that time, shareholders donated their stakes in ECC to create a governance structure with checks and balances.
In his statement, Swihart explained that employment conditions had been altered in such a way that made it impossible for the team to fulfill its duties effectively and with integrity. He named board members Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai by name and accused them of no longer aligning with Zcash's original mission.
Under U.S. labor law, a constructive dismissal occurs when an employer makes working conditions so intolerable that a reasonable employee feels compelled to resign. Such resignations may not legally be considered voluntary. Accordingly, the entire team left ECC within 24 hours and immediately announced the founding of a new, independent company.
From Zerocoin research to privacy standard
Zcash emerged from the experimental Zerocoin project, which was developed in 2016 by seven scientists to improve Bitcoin's privacy features. The Zerocoin Company, now known as Electric Coin Company, raised $3 million to develop the original protocol. On October 28, 2016, Zooko Wilcox officially launched Zcash. Zcash's technological innovation is based on zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge). This cryptographic method makes it possible to prove possession of certain information without revealing that information. Zcash was thus the first practical application of zk-SNARKs in a blockchain and uses the technology for shielded transactions, where sender, recipient, and amount remain private.
The protocol distinguishes between two address types: transparent addresses (t-addresses) and shielded addresses (z-addresses). Users can consequently choose whether to conduct public or private transactions. This optional privacy is a central feature of Zcash and distinguishes the project from Monero, where privacy is mandatory by default. The zk-SNARK technology has evolved considerably since launch, however. The original Sprout version from 2016 required gigabytes of RAM and dozens of seconds for a single transaction. The Sapling upgrade introduced more efficient Groth16 zk-SNARKs and reduced transaction time to under one second. The Zcash Foundation is currently integrating the new Halo2 proof system for upcoming Orchard transactions.
In 2017, Zcash cooperated with JP Morgan, which significantly increased interest in zk-SNARKs in the enterprise sector. The Zcash Foundation also organized the Powers of Tau ceremony, at the time the largest multi-party computation ceremony ever. These cryptographic ceremonies are necessary to generate the trusted parameters for zk-SNARKs.
Monero gains ground as alternative
The Zcash crisis accelerates an already ongoing capital rotation in the privacy coin segment. Monero (XMR) reached a new all-time high of $650 and is up over 35 percent since the start of the year. The privacy coin benefits from its decentralized structure without a central development team and from its stricter privacy approach. The fundamental difference lies in the privacy philosophy. Monero enforces privacy by default through three technologies: Ring Signatures obscure the sender, Stealth Addresses protect the recipient, and RingCT hides transaction amounts. All Monero transactions are private. With Zcash, in contrast, only about 25 to 30 percent of transactions use shielded addresses.
This optional privacy initially had regulatory advantages for Zcash. Exchanges could list ZEC because transparent transactions enable compliance review. Monero, in contrast, was delisted from several major exchanges. But optional privacy also means that Zcash coins are not fully fungible. Transparent transactions can be traced back, which can potentially lead to discrimination of certain coins.
The ZEC price fell over 16 percent within 24 hours after the resignations became known. Analysts are therefore observing capital flight from Zcash to Monero. XMR overtook ZEC in market capitalization and established itself again as the leading privacy coin. Trader Peter Brandt compares Monero to silver and forecasts a possible rise to $1,000. The market rotation reflects fundamental differences in the perception of both projects. Monero has no central development organization, no formal leadership structure, and no company that could be subject to conflicts. Development occurs exclusively through community contributions. Zcash, in contrast, was always closely tied to ECC, which now becomes a weakness.
Decentralization as stress test
The resignations join a series of leadership changes at Zcash. Zooko Wilcox stepped down in December 2023 after eight years as project leader. Peter Van Valkenburgh left the Zcash Foundation board in January 2025. Swihart himself only took over the CEO position in late 2023. The repeated leadership changes thus point to deeper governance problems. The former ECC team nevertheless immediately founded a new company and announced the development of cashZ, a privacy wallet based on the original Zashi code. The developers emphasize they will continue working on "unstoppable private money." Still, Zcash loses the team that has significantly shaped the protocol since the 2016 launch.
The Zcash protocol itself remains functional, however. The blockchain is fully operational, transactions are processed normally, and block production runs as planned. As an open-source project, Zcash's security is not tied to a single organization. Still, the question arises who will drive protocol development forward and how the governance structure can be reformed.
The Zcash Foundation continues to exist as a separate organization and could coordinate development. Also, the Zcash community remains active, and additional independent developers could contribute. The decentralized nature of open-source projects theoretically enables the continuation of development even without ECC. Practice will show whether this succeeds.
Privacy coins between decentralization and regulation
The Zcash exodus illustrates the tensions between centralized development and decentralized ideals in the crypto sector. Monero benefits from its community-driven development without a formal corporate structure. At the same time, the Zcash crisis shows that governance conflicts in nonprofit structures can pose significant risks.
The regulatory landscape for privacy coins also remains challenging. While Zcash initially had a compliance advantage through its optional privacy, this led to lower actual privacy usage. Monero offers stronger privacy, but has greater regulatory hurdles. The coming months will show whether Zcash can overcome the governance crisis and regain the community's trust.
