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The core development team behind Zcash has severed ties with the Electric Coin Company, triggering a sharp governance crisis that briefly shook market confidence and sent the ZEC token sliding before volatility picked up across exchanges.
The dispute centers on allegations of “malicious governance” within Bootstrap, the nonprofit entity that controls ECC, and has now resulted in the entire ECC staff resigning and moving to form a new, independent company.
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, said the break followed weeks of escalating conflict with a majority of the Bootstrap board.
Swihart said in his post on X that board members Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai altered employment terms in ways that made it impossible for the team to carry out its responsibilities.
He described the situation as a constructive discharge, a legal concept used when working conditions are changed so severely that employees are effectively forced to resign. On January 7, the full ECC team walked out together.
Swihart said the group will now found a new company and continue pursuing the same goal that has defined Zcash since its launch: building privacy-preserving digital money.
He stressed that the decision was about shielding the team’s work from governance actions they viewed as hostile, not about abandoning the protocol itself.
Zcash’s codebase is open source, permissionless, and not owned by any single organization, meaning the network continues to operate regardless of internal disputes among its support entities.
The reaction in the market was swift as ZEC fell roughly 7% following the news before recovering some ground amid heavy trading.
The token has just been in a recent trade of about $455 after it had visited a short-lived level of about $480, with the 24-hour trading volume surging by over 30% to approximately 800 million.
Balancing Power at Zcash Proves More Complicated Than Planned
Zcash’s governance structure has been unusual from the start, as the project emerged from academic research into zero-knowledge cryptography, with ECC formed in 2015 to build and launch the protocol in 2016.
To reduce centralization, the Zcash Foundation was created in 2017 as an independent nonprofit, and in 2019 ECC transferred the Zcash trademark to the Foundation under a joint approval model requiring agreement from both sides.
In 2020, ECC itself became a nonprofit subsidiary under Bootstrap after shareholders donated their equity.
That structure, designed to balance power, has also produced friction. Disagreements intensified over the future of the development fund, which allocates part of Zcash block rewards to support ongoing work and is set to expire in late 2025.
Swihart had publicly pushed for ending direct protocol funding in favor of grants and other mechanisms, arguing that it would further decentralize the ecosystem.
The former ECC CEO and Zcash founder, Zooko Wilcox, came out to reassure users that the dispute has no impact on the network security or privacy assurances.
Although he refused to take sides, he claimed that he had been working with the Bootstrap board members over the years and they were of high integrity.
No criminal conduct has been alleged by either side, and the conflict remains a corporate and governance dispute rather than a legal case.
What happens next centers on organizational realignment rather than enforcement action. The newly formed company plans to continue privacy-focused development independently, while Bootstrap and the Zcash Foundation are expected to reassess how protocol development is funded and coordinated going forward.
