Zcash Foundation Reports Q1 Results: SEC Ends Probe, Liquid Assets Reach $36.7M

Organization responsible for supporting financial privacy infrastructure for the Zcash network, Zcash Foundation reported in its first-quarter 2026 update that the US Securities and Exchange Commission has concluded its investigation without recommending enforcement action. The development was described as a major source of regulatory clarity for the organization and the wider Zcash ecosystem following a review that began with a subpoena issued in August 2023 as part of an inquiry into certain crypto asset offerings.

In the report, the organization stated that the SEC informed it that no enforcement measures or additional actions would be pursued in relation to the matter. The outcome was presented as a reflection of the group’s commitment to transparency and regulatory compliance while continuing its work on privacy-focused financial infrastructure.

The quarter was also marked by major internal changes across the broader Zcash ecosystem. Governance disagreements within Electric Coin Company resulted in the departure of much of its development team during the period. Despite those disruptions, the report emphasized that the Zcash network continued operating without interruption. Blocks continued to be produced, transactions were processed normally, and no user funds or privacy protections were affected. The organization said the situation demonstrated the resilience of decentralized infrastructure, arguing that the network’s ability to function independently of any single entity validated the principles on which it was designed.

As of March 31, the organization reported approximately $36.7 million in liquid assets. Holdings included 85,412 ZEC, 41.8 BTC, about 506,600 USDC, and a smaller amount of ETH. Average monthly operating expenses were reported at roughly $272,500.

Infrastructure Expansion and Technical Development

The report also outlined several technical and infrastructure developments completed during the quarter. After DNS seeders operated by Electric Coin Company stopped responding, replacement seeders were deployed in both the United States and Europe within days to maintain uninterrupted peer discovery across the network. A native Rust-based DNS seeder was also introduced, featuring enhanced protections against amplification attacks and integrated monitoring capabilities.

Engineering updates included the release of Zebra 4.0.0 and Zebra 4.1.0, both aimed at improving observability, operational efficiency, and monitoring functions. Development work also continued on Network Upgrade 7, expansion of Zebra’s RPC layer, and construction of the Z3 stack, which integrates Zebra, Zaino, and Zallet with built-in Tor support.

The report further highlighted progress on FROST v3.0.0-rc.0, a multi-party signing system that now includes default cheater detection, stronger zeroization measures, and improved asynchronous support. The organization said finalization of FROST v3 and ZIP-312 remains on schedule for later this year.

Looking ahead, priorities for the second quarter include continued implementation of Network Upgrade 7, advancement of the Z3 stack, and additional Zebra performance benchmarking. The report concluded that the events of the quarter illustrated how decentralized systems can maintain continuity and operational stability during periods of organizational transition.

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