Zcash Team Abandons Electric Coin Company Over “Malicious Governance”—ZEC Plunges 7%

The core growth staff behind Zcash has severed ties with the Electric Coin Company, triggering a pointy governance disaster that briefly shook market confidence and despatched the ZEC token sliding earlier than volatility picked up throughout exchanges.

The dispute facilities on allegations of “malicious governance” inside Bootstrap, the nonprofit entity that controls ECC, and has now resulted in your complete ECC workers resigning and transferring to kind a brand new, impartial firm.

Zcash Builders Quit After Board Alters Employment Terms; New Company To Form

Josh Swihart, who took over as CEO of Electric Coin Company in late 2023, mentioned the break adopted weeks of escalating battle with a majority of the Bootstrap board.

Swihart said in his publish on X that board members Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai altered employment phrases in ways in which made it not possible for the staff to hold out its tasks.

Over the previous few weeks, it is turn into clear that almost all of Bootstrap board members (a 501(c)(3) nonprofit created to help Zcash by governing the Electric Coin Company), particularly Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai (ZCAM), have moved into…

— Josh Swihart (@jswihart) January 7, 2026

He described the state of affairs as a constructive discharge, a authorized idea used when working circumstances are modified so severely that workers are successfully pressured to resign. On January 7, the complete ECC staff walked out collectively.

Swihart mentioned the group will now discovered a brand new firm and proceed pursuing the identical aim that has outlined Zcash since its launch: constructing privacy-preserving digital cash.

He burdened that the choice was about shielding the staff’s work from governance actions they seen as hostile, not about abandoning the protocol itself.

Zcash’s codebase is open supply, permissionless, and never owned by any single group, that means the community continues to function no matter inner disputes amongst its help entities.

The response out there was swift as ZEC fell roughly 7% following the information earlier than recovering some floor amid heavy buying and selling.

The token has simply been in a latest commerce of about $455 after it had visited a short-lived stage of about $480, with the 24-hour buying and selling quantity surging by over 30% to roughly 800 million.

Balancing Power at Zcash Proves More Complicated Than Planned

Zcash’s governance construction has been uncommon from the beginning, because the undertaking emerged from educational analysis into zero-knowledge cryptography, with ECC fashioned in 2015 to construct and launch the protocol in 2016.

To scale back centralization, the Zcash Foundation was created in 2017 as an impartial nonprofit, and in 2019 ECC transferred the Zcash trademark to the Foundation beneath a joint approval mannequin requiring settlement from either side.

In 2020, ECC itself grew to become a nonprofit subsidiary beneath Bootstrap after shareholders donated their fairness.

That construction, designed to steadiness energy, has additionally produced friction. Disagreements intensified over the way forward for the event fund, which allocates a part of Zcash block rewards to help ongoing work and is ready to run out in late 2025.

Swihart had publicly pushed for ending direct protocol funding in favor of grants and different mechanisms, arguing that it will additional decentralize the ecosystem.

The former ECC CEO and Zcash founder, Zooko Wilcox, got here out to reassure customers that the dispute has no affect on the community safety or privateness assurances.

Big drama in a single (or two now?) of the various Zcash help orgs. None of it entails me or Shielded Labs, and it is not my place to opine on it, besides I would like you to let you know two issues: https://t.co/QJmH9vhbBS

— zooko ⓩ (@zooko) January 7, 2026

Although he refused to take sides, he claimed that he had been working with the Bootstrap board members over time they usually have been of high integrity.

No felony conduct has been alleged by both facet, and the battle stays a company and governance dispute slightly than a authorized case.

What occurs subsequent facilities on organizational realignment slightly than enforcement motion. The newly fashioned firm plans to proceed privacy-focused growth independently, whereas Bootstrap and the Zcash Foundation are anticipated to reassess how protocol growth is funded and coordinated going ahead.

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