Zcash Crashes as Core Dev Team Walks Out Over Governance Fight

Zcash just took a hard hit. The privacy-focused cryptocurrency plunged below $400, shedding nearly 20% in a single day, after the entire core development team behind Electric Coin Company (ECC) abruptly exited the project following a governance dispute.

The fallout has rattled traders, reignited long-standing debates around crypto governance, and raised fresh questions about whether Zcash can sustain momentum without the team that built it.

Price Tanks as Electric Coin Company Implodes

The token behind Zcash dropped to around $397, marking an 18% daily loss and more than 24% over the week, according to CoinGecko data. The move erased a chunk of what had been an otherwise explosive year, with Zcash previously up more than 670% amid renewed interest in privacy coins. 

The selloff followed news that the full team at Electric Coin Company, the original developer of Zcash, had walked away from the organization.

‘Constructively Discharged’

Former ECC CEO Josh Swihart said the team was “constructively discharged” after a breakdown in relations with the board of Bootstrap, a nonprofit that supports the Zcash ecosystem.

In U.S. employment law, constructive discharge means employees are effectively forced out due to intolerable or hostile conditions.

Swihart accused several board members-Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai-of being in “clear misalignment with the mission of Zcash.” He confirmed the departing team plans to launch a new company with the same goal: building “unstoppable private money.” 

Importantly, he stressed that the Zcash protocol itself remains unaffected.

Zashi Wallet Deal Sparks the Conflict

At the heart of the dispute lies Zashi, a mobile wallet developed by ECC and widely used in the Zcash ecosystem. 

According to Bootstrap’s official statement, the board had been evaluating external investment and potential privatization structures for Zashi. While not opposed to for-profit models, the board said such moves must comply with U.S. nonprofit law and protect assets intended for the public good. 

Bootstrap warned that privatizing Zashi could expose Zcash to legal and political risks, including lawsuits from donors-potentially jeopardizing the entire ecosystem.

The board even referenced OpenAI’s controversial transition toward a for-profit model, which has drawn lawsuits from Elon Musk, as a cautionary example.

Founders Push Back as Governance Debate Explodes

Zcash co-founder Zooko Wilcox-O'Hearn sought to calm nerves, assuring users they can “safely continue to use Zcash.” He also defended the integrity of the board members named by Swihart, calling them people of “exceptionally high integrity.”

Zcash’s governance remains fully decentralized, meaning no single entity controls the blockchain. All protocol upgrades still require community approval, not board decisions.

Market Outlook: Uncertainty, but Not a Death Sentence

Prediction markets aren’t optimistic in the short term. On Myriad, traders currently assign a 51% probability that Zcash falls toward $250 before rebounding to $550.

Still, some investors see long-term value. Rajiv Sawhney, head of international portfolio management at Wave Digital Assets, said Zcash’s technology and brand still matter, citing ongoing demand for financial privacy.

That uncertainty, however, comes with a policy risk discount, as privacy coins remain under heavy regulatory scrutiny worldwide.