SEC Clears Zcash Foundation as ZEC Rallies on Regulatory Relief

Regulatory Developments - The SEC has concluded its review of the Zcash Foundation and will not recommend any enforcement action or regulatory changes, removing a legal overhang that had persisted for over two years [1][3] - The SEC's investigation began in August 2023, focusing on whether Zcash-related funding, governance, or token distribution could fall under US securities law [2][3] Market Reaction - Following the SEC's announcement, ZEC surged to nearly $440, reflecting a 13% increase on the day, as traders anticipated lower regulatory risk [2] - The price rally occurred amidst governance turmoil within the Zcash ecosystem, which had previously caused a significant drop in the token's value [2][5] Governance Issues - The Zcash ecosystem faced a crisis when the entire core development team at Electric Coin Company (ECC) resigned due to disputes with the Bootstrap Foundation over governance changes [4][5] - This leadership change led to a sell-off, with ZEC dropping more than 20% as investors expressed concerns about the stability of protocol leadership [5] Network Stability - Despite the governance turmoil, Zcash stakeholders have reassured that the blockchain remains decentralized and operational [6] - The team is restructuring as a startup to scale the network, with independent developers, node operators, and miners continuing to support the network's operations [6]