Zcash Exodus: Core Team Flees Electric Coin Company Amid ’Malicious Governance’ Allegations—ZEC Tanks 7%

Internal mutiny rocks one of crypto's original privacy coins.

The Great Zcash Schism

The founding team behind Zcash has executed a full-scale abandonment of the Electric Coin Company (ECC), the project's primary corporate steward. The exit, described by insiders as a direct response to "malicious governance" tactics, triggered an immediate 7% plunge in ZEC's value. It's a stark reminder that in crypto, the most potent attacks often come from within the boardroom, not the blockchain.

Governance Gone Rogue

Sources close to the departing developers paint a picture of a governance structure weaponized against the project's original ethos. Decisions allegedly bypassed technical merit in favor of centralized control, pushing key architects to walk. The move strips the ECC of its most vital asset: the human capital that built Zcash's famed privacy shields. When your core builders head for the exits, it's rarely a bullish signal—unless you're shorting the token.

Market Reacts to the Power Vacuum

Traders didn't wait for a post-mortem. The 7% sell-off reflects a market pricing in profound uncertainty. Who steers the protocol now? Can development momentum continue without its pioneers? For a project competing in the brutal privacy niche, this level of internal drama is a luxury it can't afford. It's the crypto equivalent of the pilots bailing out mid-flight and asking the passengers if anyone has a pilot's license.

The Road Ahead: Fork in the Chain?

All eyes are now on whether the departed team will rally community support for a fork or a new iteration. Their credibility remains high among Zcash purists. Meanwhile, the ECC faces a monumental trust deficit. The episode serves as a brutal case study in how not to manage a decentralized project—centralize, alienate, and watch your valuation evaporate. Another day, another governance failure proving that sometimes, the most secure code can't protect against flawed human politics.

Zcash Builders Quit After Board Alters Employment Terms; New Company To Form

Josh Swihart, who took over as CEO of Electric Coin Company in late 2023, said the break followed weeks of escalating conflict with a majority of the Bootstrap board.

Swihart said in his post on X that board members Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai altered employment terms in ways that made it impossible for the team to carry out its responsibilities.

Over the past few weeks, it's become clear that the majority of Bootstrap board members (a 501(c)(3) nonprofit created to support Zcash by governing the Electric Coin Company), specifically Zaki Manian, Christina Garman, Alan Fairless, and Michelle Lai (ZCAM), have moved into…

He described the situation as a constructive discharge, a legal concept used when working conditions are changed so severely that employees are effectively forced to resign. On January 7, the full ECC team walked out together.

Swihart said the group will now found a new company and continue pursuing the same goal that has defined Zcash since its launch: building privacy-preserving digital money.

He stressed that the decision was about shielding the team’s work from governance actions they viewed as hostile, not about abandoning the protocol itself.

Zcash’s codebase is open source, permissionless, and not owned by any single organization, meaning the network continues to operate regardless of internal disputes among its support entities.

The reaction in the market was swift as ZEC fell roughly 7% following the news before recovering some ground amid heavy trading.

The token has just been in a recent trade of about $455 after it had visited a short-lived level of about $480, with the 24-hour trading volume surging by over 30% to approximately 800 million.

Balancing Power at Zcash Proves More Complicated Than Planned

Zcash’s governance structure has been unusual from the start, as the project emerged from academic research into zero-knowledge cryptography, with ECC formed in 2015 to build and launch the protocol in 2016.

To reduce centralization, the Zcash Foundation was created in 2017 as an independent nonprofit, and in 2019 ECC transferred the Zcash trademark to the Foundation under a joint approval model requiring agreement from both sides.

In 2020, ECC itself became a nonprofit subsidiary under Bootstrap after shareholders donated their equity.

That structure, designed to balance power, has also produced friction. Disagreements intensified over the future of the development fund, which allocates part of Zcash block rewards to support ongoing work and is set to expire in late 2025.

Swihart had publicly pushed for ending direct protocol funding in favor of grants and other mechanisms, arguing that it WOULD further decentralize the ecosystem.

The former ECC CEO and Zcash founder, Zooko Wilcox, came out to reassure users that the dispute has no impact on the network security or privacy assurances.

Big drama in one (or two now?) of the many Zcash support orgs. None of it involves me or Shielded Labs, and it's not my place to opine on it, except I want you to tell you two things:https://t.co/QJmH9vhbBS

Although he refused to take sides, he claimed that he had been working with the Bootstrap board members over the years and they were of high integrity.

No criminal conduct has been alleged by either side, and the conflict remains a corporate and governance dispute rather than a legal case.

What happens next centers on organizational realignment rather than enforcement action. The newly formed company plans to continue privacy-focused development independently, while Bootstrap and the Zcash Foundation are expected to reassess how protocol development is funded and coordinated going forward.