Zcash fell 7.6% on the day, defying what would typically be seen as a regulatory win, after the Zcash Foundation said the U.S. Securities and Exchange Commission (SEC) has concluded its investigation into the public charity without recommending enforcement action.
Summary
- The Zcash Foundation announced that the SEC has closed its investigation into the organization, without recommending enforcement action.
- The inquiry, which began in August 2023, raised concerns over certain crypto asset offerings but has now been resolved.
- Following the news, the ZEC token surged 12%, reversing a recent decline. But today’s downward trajectory underscores a familiar dynamic in crypto trading, where lingering uncertainty around privacy coins can outweigh favorable regulatory developments.
The announcement, disclosed in a statement Tuesday, appeared to remove a major overhang for the privacy-focused cryptocurrency, which has long faced heightened scrutiny from regulators.
But the market reaction underscored a familiar dynamic in crypto trading, where broader risk sentiment, profit-taking, or lingering uncertainty around privacy coins can outweigh even favorable regulatory developments.
What happened?
The foundation received a subpoena from the SEC on August 31, 2023, as part of an inquiry titled “In the Matter of Certain Crypto Asset Offerings (SF-04569),” the statement said.
The SEC informed the foundation it does not plan to recommend any enforcement actions or changes pertaining to the organization.
The Zcash token rose 12% following the announcement, according to market data. Indeed, the price increase reversed a recent decline in the cryptocurrency’s value. But it didn’t last.
The token is down 3.7% for the week, and up just 0.2% for the month. Yes, over the course of a year, it’s up 642.3%, but it remains significantly below (-87.2%) its all-time high.
The development comes amid shifts in digital asset regulation under the current administration, including the appointment of Paul Atkins as SEC chair. The commission dropped similar enforcement actions against companies including Uniswap, Coinbase and Robinhood in 2024, according to regulatory filings.
In its statement, the foundation said it remains committed to transparency and regulatory compliance. The organization stated its focus continues to be advancing financial infrastructure that preserves user privacy.
