Zcash Ecosystem Shakeup: ECC Team Resigns En Masse to Form a New Company, Privacy Coin Sector Roils Again

The entire core development team of Zcash, ECC (Electric Coin Company), resigned collectively on January 7th due to serious disagreements over the mission philosophy with some directors of the Zcash governance body Bootstrap (ZCAM). Former CEO Josh Swihart emphasized that this move was to resist destructive interference from the governance layer and to ensure the team could continue advancing privacy technology. While Swihart stressed that the Zcash protocol itself remains unaffected, this split still reflects internal power conflicts within the ecosystem and occurs at a sensitive moment when privacy coins are regaining market attention.

How Governance Disputes Evolved into a Team Split

Roots of the Dispute

According to Swihart, ECC and the Bootstrap board have “serious disagreements” over the mission. Although the details of the specific disagreements were not elaborated, the language suggests this is not a technical debate but a fundamental divergence over the development direction and core values of Zcash. ECC emphasizes sticking to the core mission of “unblockable private currency,” which implies that the governance layer may have deviated from this original intent in certain aspects.

Significance of the Collective Resignation

The collective resignation of all members is not a passive layoff but an active protest. This indicates that the ECC team shares a high consensus on their principles and is willing to give up their current positions to uphold their mission. They are also immediately establishing a new company to continue developing privacy technology, showing that this is not just a simple resignation but a “walkout” carrying mission and resources.

Context of the Privacy Coin Sector Heating Up

New Market Awareness of Privacy Assets

According to recent reports, privacy coins performed remarkably in 2025. Zcash (ZEC) surged over 800% in the past year, far outperforming mainstream cryptocurrencies. This reflects a rising market demand for privacy technology—driven by regulatory pressures, transaction privacy needs, and new institutional investor awareness.

Institutional Capital Entry

Multiple signals indicate that institutional investors are beginning to value privacy assets. Arthur Hayes’s investment fund Maelstrom has built large ZEC positions, and listed companies like Cypherpunk plan to hold ZEC as part of their asset reserves. Grayscale’s Zcash trust management fees have also increased to $440,000 per week as the coin’s price rises. All these point to privacy no longer being a niche demand but an asset allocation option at the institutional level.

Impact Assessment of ECC’s Split on Zcash

Risks to Watch

• Whether the new ECC company’s funding and talent pool can support long-term development
• How the relationship between Bootstrap and the new company evolves (risk of code forks)
• Whether market negative perceptions of the team split will suppress ZEC’s short-term performance

The Broader Landscape of Privacy Coins

This incident occurs at a critical moment. Privacy coins, once stigmatized as “black market tools,” are being redefined as “on-chain privacy infrastructure.” Whether it’s Sui’s 2026 privacy transaction plans or ongoing innovations by Monero and Zcash, the entire privacy sector is undergoing a conceptual and market upgrade.

In this context, ECC’s steadfastness and departure can be seen as a “faith confirmation” of the purity of privacy ideals. This may be interpreted by the market as a positive signal—the core team prefers splitting rather than compromising on their mission.

Summary

ECC’s collective resignation marks a major upheaval in the Zcash ecosystem, but from a broader perspective, it reflects conflicts over the understanding of privacy missions amid the sector’s heating up. Swihart’s emphasis (that the protocol itself is unaffected and the new company will continue development) suggests this is more of a “ideological dispute” than a “life-and-death crisis.”

In the short term, the market will need to observe the new company’s progress and Bootstrap’s response strategies. In the long run, whether the Zcash ecosystem can achieve better coordination after the split, and whether the privacy coin sector can realize genuine breakthroughs driven by institutional capital, are the key issues to watch.