Zcash Cleared: SEC Drops Investigation as ZEC Reclaims $430
SEC ends its multi-year probe into the Zcash Foundation without charges, triggering a 12% rally in ZEC prices.
Probe Closed: No Enforcement Action
The Zcash Foundation confirmed Wednesday that the U.S. Securities and Exchange Commission (SEC) has terminated its investigation into the privacy protocol. The agency informed the Foundation it does not intend to recommend enforcement action, closing a potentially existential chapter for the asset.
Markets reacted instantly. ZEC spiked 12% to trade at $437, decoupling from a flat broader market. Volume across major centralized exchanges surged 39% in the hour following the announcement.
The “SF-04569” Inquiry
The investigation, formally titled “In the Matter of Certain Crypto Asset Offerings (SF-04569),” began in August 2023 under the previous administration. The probe targeted the Foundation’s status and the nature of ZEC’s distribution. While the SEC subpoenaed documents and testimony, the closure without penalty suggests the regulator failed to find grounds to classify the privacy-centric asset as an unregistered security under current interpretations.
The SEC has concluded its review and informed us that it does not intend to recommend any enforcement action or other changes against Zcash Foundation regarding this matter.
Institutional Context
This dismissal aligns with the strategic pivot observed under SEC Chair Paul Atkins. Since taking office, the agency has deprioritized legacy investigations into decentralized protocols that do not involve clear fraud or misappropriation. For privacy coins specifically, this marks a critical precedent: regulatory scrutiny does not automatically equal non-compliance. Market makers, previously hesitant to provide liquidity for obfuscated ledgers due to compliance fears, may now re-evaluate risk models for assets like Monero (XMR) and Zcash.
