Zcash ‘Civil War’: ECC Team Quits En Masse to Launch Rival Startup
The entire Electric Coin Company staff resigned after a failed wallet spin-out, crashing ZEC 11% as the team pivots to a new for-profit entity, Cashz.
Core Developers Allege ‘Constructive Discharge’ as ZEC Slides 11%
The entire engineering and leadership team behind the Electric Coin Company (ECC), the primary developer of the Zcash protocol, resigned collectively on January 7, citing a total breakdown in governance with its non-profit parent, Bootstrap. The market reacted swiftly: ZEC liquidated 11% to $426, threatening its dominance in the privacy sector.
ECC CEO Josh Swihart led the exodus, publicly accusing the Bootstrap board of “constructive discharge,” a legal term implying working conditions were made intentionally impossible. The departing team immediately announced Cashz, a for-profit entity that will fork their previous work on the Zashi wallet to operate without non-profit constraints.
The Receipt: Startup Velocity vs. Non-Profit Compliance
The schism centers on a failed attempt to spin out the Zashi wallet. According to Swihart, the Bootstrap board blocked external investment and monetization plans for the wallet, effectively freezing ECC’s ability to compete. He named board members Zaki Manian, Christina Garman, and Alan Fairless as the blockage, claiming they “moved into clear misalignment” with the project’s mission.
“We need to scale Zcash to billions of users. Startups can scale, but nonprofits can’t. That’s why we created a new Zcash startup.”, Josh Swihart, Cashz CEO
Bootstrap countered that the proposed spin-out risked violating US 501(c)(3) tax laws. In a statement, the board argued that transferring assets like Zashi to a private entity could be viewed as “private capture” of public goods, potentially exposing the foundation to donor lawsuits and regulatory revocation.
Market Impact: Monero Capitalizes
While the Zcash protocol remains operationally secure, it is open-source and permissionless, the governance vacuum rattled confidence. ZEC volumes spiked to $1.36B as holders derisked, pushing the token down 11% to $426. The turmoil allowed rival Monero (XMR) to arguably strengthen its narrative stability, though Zcash remains a top-20 asset by capitalization ($7B).
What’s Next: Cashz vs. Bootstrap
The Cashz team claims they will retain the “agility and technical integrity” of the original ECC roadmap, stripping away the bureaucratic layer. They plan to migrate Zashi users to the new Cashz wallet in the coming weeks. Bootstrap is now left with the intellectual property rights and the non-profit mandate, but zero full-time developers to execute the vision.
