Zcash Developers Split from Electric Coin Company to Form New Firm

The core development team behind Zcash has severed ties with the Electric Coin Company (ECC), triggering a sharp governance crisis and sending the ZEC token down nearly 7% in the 24 hours following the announcement.

The dispute centers on allegations of 'malicious governance' within Bootstrap, the nonprofit entity that controls ECC, according to ECC CEO Josh Swihart. He described the situation as a constructive discharge, a legal term used when working conditions are altered to the point that employees are effectively forced to resign.

The ECC team, now split from the company, plans to form a new organization to continue developing Zcash and other privacy-focused technologies. Swihart emphasized that the decision was driven by a desire to protect the team's work from governance actions they viewed as hostile, not by any change in the project's core mission.

Why the Move Happened

Swihart named Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai as the majority board members of Bootstrap who, in his view, moved out of alignment with the mission of Zcash. He claimed that changes in employment terms rendered it impossible for the team to perform their duties effectively.

The governance structure of Zcash has long been designed to balance power among different entities, including nonprofits, companies, and open-source communities. However, these checks and balances have also led to friction, particularly over the future of the development fund and how it is financed.

How Markets Responded

ZEC's price dropped to around $461 in the 24 hours following the news, reflecting investor uncertainty over the project's governance and future direction. The token had recently surged to $723 in late 2025 before entering a consolidation phase.

The broader cryptocurrency market remained relatively stable, suggesting that the sell-off was tied specifically to governance concerns rather than a broader market downturn. Zcash's open-source and decentralized nature means the network itself is unaffected, but the loss of its core development team raises questions about ongoing maintenance and innovation.

What Analysts Are Watching

Analysts are monitoring how the Zcash community and stakeholders respond to the governance breakdown. Options include forming a new development collective, pursuing a hard fork of the protocol, or relying on Bootstrap to recruit new developers.

Zcash founder Zooko Wilcox has publicly supported the Bootstrap board, describing them as individuals of 'exceptionally high integrity.' He emphasized that the Zcash protocol will continue to operate normally and that users can safely continue using the network.

The coming weeks will be crucial for Zcash. The project's long-term viability will depend on whether the community can establish a new governance model that aligns with the original vision of the developers and the broader Zcash ecosystem.