coindesk.com
The development team behind the zcash ZEC$421.28 privacy coin rocked the network Thursday, saying it left to form a new company after a dispute with Bootstrap, a nonprofit created to support the network. Still, the move is unlikely to change much for the second-largest privacy platform, according to Mert Mumtaz, CEO of Solana's API platform Helius.
Zcash "did not lose anything" Mumtaz said in an X post. "The ECC team did not like their board, so they started the exact same company with a different name and no board ... meaning they are now unburdened by politics."
The departure sent zcash tumbling by as much as 19%, putting a dampener on what had been a tremendous year of growth. It climbed 880% in 2025. Larger rival monero XMR$461.13 rallied following the announcement.
The team, which worked for Electric Coin Company (ECC), one of the two main developers, said it would continue working on the token. Bootstrap remains the nonprofit organization overseeing Zcash, and could even fund the new development company through open grants.
"Importantly, the Zcash protocol is unaffected," ECC's now-former CEO Josh Swihart said in an X post. "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."
The dispute centered around potentially privatizing Zashi, a mobile wallet for the protocol, with the aim of receiving external investment. Bootstrap said in a statement that it was working with legal counsel to ensure any path forward would comply with U.S. law and not jeopardize the broader Zcash community.
'Clear misalignment'
The departing team members said Bootstrap's methods were at odds with wider Zcash goals.
The Bootstrap board was in "clear misalignment" with the mission of Zcash, Swihart wrote, claiming the team had been "constructively discharged."
Sean Bowe, a prominent cryptographer and former ECC engineer, said the decision to regroup under a new structure would free it from what he described as Bootstrap’s overly cautious governance, allowing builders to better pursue Zcash’s mission.
"We were not slaves, and we would leave if we felt we could build Zcash better under a different structure. Well, that's exactly what happened a couple days ago," he wrote on X.
Arjun Khemani, a self-described "memetic warlord" at Zcash, reiterated the sentiment, writing on X that "no one from Zcash has quit," and that the entire team of builders is more aligned than ever.
"They understood that you can’t let bureaucracy get in the way of the future of freedom."
On the surface, the drama seems to be a net negative. The token fell by the most since Dec. 1, developers are frustrated and there is clearly a fracture between Bootstrap and those building the network.
But in reality, the team that built features such as shielded transactions and the Tachyon upgrade will still be working on the network, just under a new name.
Zooko Wilcox, an ex-CEO of Electric Coin Company, also said Thursday's events will have no impact on the Zcash network.
"The Zcash network is open source, permissionless, secure, and private, and nothing that happens in this conflict can change that. You can safely continue to use Zcash."
Monero's gain
Even so, while there will likely not be a meaningful change in terms of day-to-day development, strained relationships from this whole ordeal may still spill over on a structural level over the coming months.
The disconnect may have benefited Monero, whose token added as much as 6.5%, according to CoinDesk data. XMR is now trading at an $8.4 billion market cap, extending its lead over ZEC which is now at $7 billion.
Julian, founder of web3 security firm CipherLabs, posted a comparison on the ZEC and XMR charts on X, writing: "This says it all to be honest. As an advocate of real privacy I’ll go with monero. VC backed versus a real privacy token that has real demand."