The U.S. Securities and Exchange Commission concluded a two-year investigation of the Zcash Foundation and declined to bring enforcement action, removing a persistent regulatory overhang for the privacy-focused token. Markets reacted quickly: ZEC surged and traded with sharply higher volume as traders repriced regulatory risk.
According to the foundation, the SEC closed the probe that began after a subpoena in August 2023 and issued a de facto “no-action” outcome. The announcement coincided with an immediate price jump: ZEC climbed roughly 6%–14%, at times trading near $440–$445, while trading volume spiked more than 30% as market participants adjusted positions.
That move compounded an already strong run for ZEC — the token recorded parabolic gains, ranging from about 500% to 1,500% since April 2025 — driven by renewed demand for privacy features and expectations of regulatory clarity.
The decision matters because it reinforces a clearer pathway for privacy projects to engage with regulators while prompting fresh institutional interest in Zcash products.
Precedent, institutional interest and persistent risks
The SEC’s resolution has been framed as a meaningful precedent for privacy coins and appears to have encouraged institutional players. Data from coverage noted that Grayscale has filed to convert its Zcash Trust into a spot ETF, a step that would widen regulated access to ZEC for mainstream investors.
At the same time, sources cautioned that the ruling is not an all-clear for every privacy-focused project. Governance strains within the Zcash ecosystem and continued scrutiny of privacy features for potential illicit use remain tangible headwinds. As one market summary put it, the agency’s “no-action” determination removed a major overhang but did not amount to blanket endorsement across the sector.
Investors are now turning their attention to the outcome of Grayscale’s conversion filing and to forthcoming governance updates from the Zcash community; those developments will test whether regulatory relief translates into sustained institutional inflows and a more stable market structure for privacy coins.
