In brief
- The CEO of the Electric Coin Company said his entire team was “constructively discharged” following a disagreement with its non-profit board members.
- The board said in a statement it was due to potential issues surrounding plans to privatise Zashi, a Zcash-centric mobile wallet.
- It said the plans could allow donors to sue and “jeopardize the entire Zcash ecosystem.”
The price of Zcash has plunged by double digits after the entire team of the Electric Coin Company—which created and contributed to the popular privacy coin—left the company.
Zcash is down 18.2% in the past 24 hours to $397.27, according to CoinGecko data. It’s also down 24% over the past 7 days. Zcash had a very strong year price-wise, rising over 670% amid more mainstream interest in privacy coins.
In a tweet, Josh Swihart, former CEO of the Electric Coin Company, said his entire team was “constructively discharged” following a disagreement with the majority of Bootstrap’s board members, a 501(c)(3) nonprofit created to support Zcash.
He said that specifically, Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai had “moved into clear misalignment with the mission of Zcash.” Swihart said he and the team would be founding a new company with the same mission of “building unstoppable private money.”
The former CEO didn’t give any details about the project—such as what it is called, when it will roll out, or whether a new token might emerge.
In U.S. employment law, “constructive discharge” is when a worker’s resignation can be classified as not voluntary, because the employer has created a “hostile or intolerable work environment” or has used “forms of pressure or coercion” to force the employee to leave.
Swihart assured users that the Zcash protocol itself “is unaffected” by the team’s departure. He added: “This decision is simply about protecting our team’s work from malicious governance actions that have made it impossible to honor ECC’s original mission.”
Founding member and former CEO of ECC, Zooko Wilcox-O’Hearn, weighed in on the situation. In a tweet, he assured traders that users can “safely continue to use Zcash.” He added that the board members highlighted by Swihart’s post were, in his personal experience, all “people of exceptionally high integrity.”
Launched in 2016, Zcash is designed to encrypt data to hide transaction details such as the sender, recipient, and amount. Using a cryptographic technique called zero-knowledge proofs, it aims to provide superior privacy compared to cryptocurrencies like Bitcoin.
Zcash does not own or control the Zcash blockchain itself. Its governance is decentralized, and all upgrades require community approval.
Decrypt has contacted the Electric Coin Company for additional comment.
The board weighs in
The members of Bootstrap clarified the background of the situation in an official statement.
The board claimed that in recent weeks it had “engaged in discussions regarding external investment and alternative structures to privatize Zashi, while working with legal counsel to ensure any path forward would comply with US nonprofit law, remain consistent with the long-term mission of Zcash, and not jeopardize the broader Zcash community.”
Zashi is a crypto wallet, often used to transfer Zcash, developed by the ECC.
The board said that while “there is nothing wrong with for-profits,” such transactions “must be done carefully, with safeguards to ensure that assets meant to serve the public interest—including contributions from donors who trusted that mission—continue to advance it, rather than being captured for private benefit.”
Bootstrap said that the proposed deal “introduces new vulnerabilities for politically motivated attacks on Zcash, which could allow donors to sue and “jeopardize the entire Zcash ecosystem.”
“A restructuring done in a way that invites scrutiny, even if well-intentioned, would damage that credibility and set back the cause of privacy and financial freedom.”
The statement cited ChatGPT firm OpenAI’s transition into a for-profit company, which has attracted lawsuits from founding member and early investor Elon Musk.
The future outlook
On prediction market Myriad, owned by Decrypt‘s parent company Dastan, users place a 51% chance on Zcash’s next move taking it to $250 rather than $550.
Rajiv Sawhney, head of international portfolio management at Wave Digital Assets, told Decrypt he believes that Zcash will continue to be viable as an investment, as its “tech and brand still matter” and there is “a persistent user demand for privacy.”
However, he questioned whether Zcash can convert that into “sustained development and distribution under the current regulatory and market constraints.”
“If the split clarifies execution and funding, it can actually be net-positive—though it creates near-term uncertainty,” Sawhney said.
He added that markets will continue to consider a “policy risk discount” when it comes to privacy coins, with potential regulation and legal risks impacting prices, listings, and institutional investment.
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